currency controls

The intricacies of Venezuela’s bizarre economic policy apparatus long ago became a subject approached with confidence only by seasoned specialists. Undaunted, Caracas this month decided to make an already byzantine currency system even more complicated by introducing another official exchange rate to the two (plus the black market version) that already exist.

The move came after pressure from falling oil prices, which have hammered Venezuela’s exports and reduced its dollar earnings. Other countries with similar problems in recent years such as Iran (and to some extent, Argentina) have also taken the route of multiple exchange rates. Read more

Argentines who can remember their last bout of hyperinflation in the late 1980s might have been bemused had they witnessed what was happening this week on Florida street in downtown Buenos Aires.

Despite inflation of around 40 per cent, the value of the dollar on the unofficial market (known as the “blue” dollar) was falling so fast on Monday that beyondbrics came across one currency exchange that refused to tell customers queuing to buy pesos what the price was, as it might have changed by the time they reached the counter.

The drop in the “blue” dollar on Monday was the biggest in months, however, it had been falling steadily ever since Alejandro Vanoli took over the central bank six weeks ago, when the dollar fetched nearly 16 pesos. On Monday it was selling at 12 pesos on Florida street – compared with the official rate of 8.5, which has remained fairly stable.

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Venezuela keeps fidgeting with its tight foreign exchange controls. Earlier this week President Nicolás Maduro announced the government was restructuring the way it allocates greenbacks in its import-dependent economy.

He said the government was establishing the “National Centre of Exterior Commerce”, an umbrella organisation to oversee the main foreign exchange agency, Cadivi, as well as the country’s forex auction mechanismsRead more

By Jake Maxwell Watts and Gwen Robinson in Bangkok

The heated debate in Thailand about whether the central bank should intervene to stem the biggest rise in the baht in 16 years intensified this week as a survey of Thai companies revealed that almost 10 per cent of entrepreneurs claim they would go out of business if the baht rose further to 27.90 to the dollar.

Thailand’s currency was hovering around 28.90 to the dollar on Thursday, down from 28.56 last week, but still nearly 6 per cent higher than at the beginning of the year. The baht’s steady appreciation has been largely driven by inflows of foreign capital seeking strong returns from Thailand’s booming economy and exiting Japan. Read more

The Thai baht hit a 16-year record on Tuesday, appreciating another 0.8 per cent and falling below 29 to the dollar for the first time since the Asian financial crisis of 1997.

The baht touched 28.93 to the dollar at one point, before weakening to just over 29. It’s a worry for policy makers, who have seen the baht appreciate by over 5 per cent already this year alone, but who don’t seem to have a lot of options. Read more

Just how merry a lot of Venezuelans will be this Christmas depends to some degree on how many dollars the government decides to make available.

But with currency controls in place since 2003, it is becoming increasingly clear that the government is not terribly inclined to dish out too many dollars just now – only on Thursday the central bank president was forced to declare on national television that one of the official mechanisms for obtaining dollars was not in fact “paralysed”. Read more

Any dollars under there?

With Ukraine’s currency plunging to a three-year low of 8.27 hryvnia to the dollar, and central bank reserves dwindling, the administration of President Viktor Yanukovich has turned to hardball tactics to preserve stability.

A series of new currency market rules adopted early this week aim to force impoverished citizens and oligarch-owned exporters into coughing up their hard currency cash. Read more