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Foreign Exchange

Venezuela: Chávez bans brokerages

President tries to eliminate parallel FX market; Claims irregularities taking place

Chávez announces his threat to close brokerages on his weekly TV programme Alo Presidente

Chávez announces his threat to close brokerages on his weekly TV programme Alo Presidente 

Hugo Chávez, the president of Venezuela, has decided to ban securities brokerages to try to curb the parallel foreign exchange market and to stem the sharp depreciation of the country’s currency, the bolivar, this year. During an appearance on state television on May 14, Chávez said he was prepared to close the brokerages – the larger of which are controlled by the nation’s main banks. He sees this as an essential measure for maintaining foreign exchange controls. The drastic step provoked fears that imports might be severely hindered, pushing inflation even higher and leading to further shortages of basic goods.

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