Venezuela bonds up again as investors welcome new forex system
By Andrew Cawthorne
CARACAS, March 25 (Reuters) - Venezuelan bonds rose again on Tuesday in a continued positive market reaction to a new free-floating foreign exchange system that offered dollars for eight times the official price at its opening session.
Traders said they expected the price for dollars to stay roughly in the 50-55 bolivars range on the Sicad 2 mechanism's second day, given the high demand and still uncertain offer.
President Nicolas Maduro's government launched the system on Monday in an effort to tame the black market for greenbacks while also giving businesses easier access to foreign currency.
Based on supply and demand, the new platform added a third state-sanctioned exchange rate to 11-year-old currency controls, where dollars also sell at 6.3 bolivars for preferential goods and around 11 bolivars for other items.
The average price at Sicad 2 on Monday was 51.8 bolivars.
That was close to the black market price of around 57-59 bolivars, according to illegal web sites that track it.
Though Maduro's opponents decried the new currency system as devaluation by stealth, Wall Street was delighted.
"There is euphoria on the first signs of pragmatism from the Maduro administration to confront macro imbalances," said Siobhan Morden, Jefferies' head of Latin America strategy. Continuación...