Weekly Report - 27 March 2013 (WR-13-12)

Venezuela’s new secondary exchange rate agency, Sistema Complementario de Administración de Divisas (Sicad), was gearing up to offer US$200m in its first auction as we went to press on 27 March. The finance ministry announced the auction just two days in advance, with little in the way of detail as to what companies/sectors could take part. Finance Minister Jorge Giordani, who has the ultimate say over this, last week warned that only companies from ‘productive’ sectors would be eligible. However, the ministry confirmed that the minimum bid rate would be BF6.30/US$1, the newly devalued official FX rate, and stipulated that bidders must put down a minimum of US$30,000 and not exceed 1% of the total auction amount (i.e. no more than US$2m).