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Venezuelan government to hand industry up to $7 billion in forex

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Staff writer ▼ | March 14, 2016
The Venezuelan government announced the creation of a new bank to help small businesses obtain raw materials and basic goods, while vowing to provide local industry with billions of dollars of new foreign currency supplies.
President Nicolas Maduro
LatAm   The National Bank for the Supply of Small and Medium Industries
The National Bank for the Supply of Small and Medium Industries (PYMIS) will improve access to basic supplies for Venezuela's smaller businesses, according to a statement from the president's office, reports.

In a separate announcement, President Nicolas Maduro said he had approved $230 million in funding for raw materials bound for domestic factories manufacturing sanitary products such as diapers. Venezuelan consumers have intermittently faced shortages of sanitary products.

According to Maduro, the new funding was obtained through the joint China Venezuela Fund.

Both PYMIS and the new raw material funding were approved under legislation passed by Maduro with decree powers. Maduro currently has special powers to pass economic legislation without the National Assembly.

Maduro's latest economic measures came a day after his Vice-President for Economy Miguel Perez Abad unveiled a package of reforms to Venezuela's foreign currency exchange regime.

Under the reforms, the government will sell US dollars to domestic industry for BsF10 to the dollar for importing priority goods like medicine. The government also said it had overhauled its non priority exchange system with a floating rate that opened at 206.92 bolivars per dollar.

Perez said the latest changes will deliver for business.

"This is a system that recognises the market," Perez said during a Reuters interview on Thursday.

He argued the reforms will see between $5.5 billion and $7 billion in foreign currency dolled out to domestic industry.