Venezuelan financial institutions began distribution on Thursday of the newly established free floating exchange rate.
Venezuelan banks and official currency exchange houses began distributing the newly established free exchange rate system known as the Simadi, or Marginal Currency System, on Thursday
The government of President Nicolas Maduro launched the Simadi, which aims at eliminating currency speculation that has been one of the major drivers of inflation, last week.
The Simadi will operate with cash, transactions and foreign currency securities, in which the market will fix or set the exchange rate.
The government replaced the parallel exchange rate known as SICAD II with Simadi, which will operate under a US$300 per day quota for buyers, but with no limit for sellers.
As a result, the Venezuelan bolivar strengthened Wednesday on the newly created free-floating foreign exchange platform, reaching 172 bolivars per dollar on its third day of operations compared with 174 on Friday.
Meanwhile, the central bank on Wednesday held a dollar auction for banks and brokerages to prepare for the start of cash sales of U.S. dollars at the Simadi rate.
