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Caracas eyes dual currency

Venezuela is preparing to introduce a de facto dual currency in order to ease pressure from a full-blown devaluation and record-high inflation, according to an adviser to the finance minister.

After the parallel “black” market value of the bolivar suffered a devaluation against the dollar of about 100 per cent during 2007, spurring annual inflation of 22.5 per cent, the new finance minister, Rafael Isea, is taking a different tack.

“The intention is to finish with the parallel market and instead allow the dollar to trade through a global bond on the local stock market, transparently and freely,” said the source, who requested anonymity. 

“Basically we are getting into a dual currency, thus avoiding having to announce a devaluation,” he said.

Importers of essential items such as food and medicine will still be able to obtain dollars at the preferential fixed official exchange rate of 2.15 “strong” bolivars to the dollar. Importers of “luxury” items and tourists, however, will have to obtain their dollars on the stock market at the more expensive rate, which

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