By Daniel Cancel and Jose Orozco
May 5 (Bloomberg) -- Venezuela’s bolivar dropped to a record low on speculation the government is preparing to step up oversight of the unregulated currency market.
The bolivar tumbled 3.3 percent in the parallel market to 7.9 per dollar, from 7.64 yesterday, traders said. That’s the lowest level since President Hugo Chavez implemented currency controls in 2003. Venezuelans turn to the unregulated market when they can’t get government approval to buy dollars at the official rates of 2.6 and 4.3 per dollar.
The currency’s decline is “worrying,” Ricardo Sanguino, the head of the National Assembly’s finance committee, told reporters in Caracas today. He said the assembly will meet with the government to “evaluate” the market. The currency plunged 24 percent this year even as the central bank sold $523.6 million of dollar bonds payable in bolivars to meet demand for U.S. currency and hold down inflation after Chavez devalued the official exchange rate by as much as 50 percent on Jan. 8.
“The government is looking to reduce the speculative elements of the market,” Asdrubal Oliveros, a director at Ecoanalitica in Caracas, said in a phone interview.
Finance Minister Jorge Giordani wasn’t immediately available to comment, a spokeswoman said today.
