Automakers in Venezuela reportedly have appealed to left-wing president Hugo Chavez to ease tough foreign exchange curbs the industry says have hampered access to currency vital for domestic production.
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According to Reuters, CAVENEZ automobile chamber said in a statement on Friday it had presented Chavez with a series of proposals to help the industry recover as the world’s fifth largest oil exporter pulls out of a sharp downturn.
“Regarding the foreign exchange regime, producers propose a revision to allow them to receive the currency essential for their operations in a more expedient manner,” it said, according to the report.
The group suggested the CADIVI currency control board establish a separate section to handle applications for dollars from the car industry, Reuters said.
Chavez introduced the currency controls and a fixed exchange rate in February last year to shore up international reserves and protect the bolivar after months of political conflict and a devastating opposition-led strike, the report added, noting that companies must apply to CADIVI for access to hard currency they need to pay for imports and foreign debt – the government has, however, steadily eased the controls by expanding the range of products and services allowed access to dollars.
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By GlobalDataPrivate-sector leaders reportedly have criticised the curbs for curtailing economic growth, and initial delays in releasing currency dogged CADIVI for months – strong demand for dollars fostered a thriving parallel exchange market.
Chavez, a populist who promises to ease poverty, often boasts that a recent rise in car sales illustrates how Venezuela is pulling out of an economic slump, Reuters said.
The report noted that a short-lived coup in April 2002 – and the two-month strike from December the same year to the end of January 2003 – disrupted oil exports and badly hit growth and consumption, including domestic car sales.
New car sales in Venezuela more than doubled in June 2004 compared with the same month a year ago, reflecting a rebound in vehicle purchases and a recovery in the economy, according to chamber statistics, Reuters added.
