May.22, 2010

VHeadline News Editor Patrick J. O'Donoghue reports: According to currency administration body (Cadivi) president Manuel Barroso, $11.8 billion worth of transactions were approved in April and he confirmed that compared to 2009, Cadivi has approved 60% more dollars this year supposedly under the$1/Bs.F 2.6 rate.

Appearing on State VTV channel, President Chavez (in the presence of his economic and exchange cabinet) said the exchange market has not been terminated but rather it was a case of "a real disaster suspended for fifteen days."

The President claimed that the government measure to intervene in the parallel market has meant a suspension of narco money-laundering in the sector, halting a real economic disaster.

Banco Central de Venezuela (BCV) president, Nelson Merentes has ratified that bond holders will be summonsed within 15 days and allowed to continue trading. It's the private banks that hold the bonds, Merentes asserted, and the BCV is asking them and brokerage houses to write up a report on their transactions. "We have to put order in the house and it is presumed that some brokerages are laundering narco-trafficking dollars and possibly some banks with international networks as well ... pure mafia."

The government, he warned, wants to get to the bottom of the recent rush on the dollar and raids on brokerage houses will continue.

The government believes that the parallel market is being used to finance an aggression against Venezuela and the recent arrest of Venezuelans in the USA accused of money-laundering would seem to justify concerns.

USA and Venezuelan authorities, Chavez said in a news breaking moment, will be meeting next Wednesday to examine material in the hands of the US officials.

President Chavez pointed to a news item in a Colombian newspaper about a clandestine factory that was discovered printing false dollars and Venezuelan bolivar notes.

The recent government measures to control the parallel exchange market have hit hard at business sectors such as tourism and imports leaving more uncertainty and confusion rather than clarity, especially for the huge self-employed sector that swells middle class sectors that live on retail trading.