Caracas, July 28th 2016 (venezuelanalysis.com) – Foreign travellers visiting Venezuela will now be able to buy national currency directly from tourism providers, including from government approved hotels and travel agencies, according to new government law.
Announced in the country’s official gazette on July 22nd, the new measures will also mean that tourists staying in four star, state or state approved hotels must pay for their accommodation in US dollars. Travel and transport agencies working in the tourism industry will also be obliged to bill foreign tourists in foreign currency.
The new legislation from the Ministry of Tourism states that service providers will be able to retain 40% of what they charge in foreign currency but will be obliged to sell the remaining 60% to the Central Bank of Venezuela.
Venezuela is currently living through an economic crisis, partly brought about by stagnant world oil prices. The situation has obliged the government to look for alternative ways to replace its foreign currency earnings from oil exports.
The move comes after the government liberated its strict currency controls for the first time in over a decade earlier in March. Venezuela now operates using a nominally free-floating market rate which sets the price of the dollar to the Venezuelan Bolivar, alongside a highly subsidised fixed rate for vital imports, health and education. The new system replaces a multi-tiered fixed exchange rate model.
The state was the only entity legally allowed to buy and sell dollars prior to the change.