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.
Go deeper with GlobalData
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.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
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.
