Shortage-hit Venezuelans scratch heads over complex devaluation
By Brian Ellsworth and Corina Pons
CARACAS Feb 13 (Reuters) - Venezuelans puzzled on Friday over the impact of a complicated currency devaluation and fretted that dire product shortages in the OPEC nation's recession-hit economy would not go away.
President Nicolas Maduro's socialist government on Thursday unveiled a 69 percent devaluation via a new "free floating" currency system known as Simadi, the third of three-tier exchange controls created by his predecessor Hugo Chavez.
"They're doing this because they don't have any money," said an 83-year-old man, who only gave his name as Felix, standing in a senior citizens' line with about 50 other people to buy rice and coffee at a Caracas supermarket.
"This is not going to solve the problem. We're going to keep waiting in line to buy anything we need."
The Simadi system has an exchange rate of 170 bolivars per dollar, but state officials insist most of the country's foreign exchange will be sold at two preferential rates: 6.3 for essential goods such as food staples, and 12 for other sectors.
The country's central bank administers dollars at those two rates, but importers complain that allocations are limited, often delayed and require overwhelming paperwork.
Dollars on the black market fetch 190 bolivars.
The two preferential exchange rates of 6.3 and 12 can help keep prices down for food and medicine, but businesses consistently struggle to get dollars at the rate, which means they cannot bring in raw materials or machine parts. Continuación...