Answer to Question #83566 in Economics for Jack

Question

Is the Currency of Venezuela fixed? Also, how is the exchange rate determined/set there?

Answer 1

Venezuelan bolivar is experiencing problems since 2003, when the late President Hugo Chavez imposed currency controls to stem capital flight after an oil strike.

Currently there are four exchange rates:

- the official one, called CENCOEX, intended for the importation of food and medicine;

- two exchange rates are SICAD I and SICAD 2 assign dollars to enterprises that import all other types of goods;

- one exchange rate is the SIMADI, reserved for the purchase and sale of foreign currency to individuals and businesses.