OPEC member Venezuela's black market exchange rate weakened below 250 bolivars per dollar on Wednesday, according to a widely referenced website, as a new foreign exchange platform struggles to satiate avid demand for dollars.
The bolivar has weakened 32 percent since the start of the year to fall to 255.43, according to website DolarToday, which says it publishes the black market rate based mostly on currency trades along the Colombian border.
Venezuela last month opened a "free-floating" currency exchange mechanism known as Simadi which currently sells dollars for 177.7 bolivars, in a bid to drive down the black market and ease shortages of goods including toilet paper, milk, and medicines.
Simadi is the weakest of a three-tiered exchange control system that also sells dollars at a preferential rate of 6.3 bolivars for imports of food and medicine and a complementary rate of around 12 bolivars for other goods.
But Simadi, like its fellow systems, is suffering from a limited supply of dollars and seems to have ended up pushing Venezuelans towards the black market.
"Anecdotal evidence suggests the authorities have so far been reluctant to authorise 'off-market' transactions that would validate a SIMADI rate closer to the parallel market," J.P. Morgan said in a note to clients.
"This, combined with our understanding that official supply of US dollars channelled through the SIMADI has so far been very small, would explain the failure of the parallel FX to converge lower, in fact quite the opposite."
Venezuelans attempting to use Simadi, particularly those involved in small-scale cash transactions, have complained of long waits, delays, and fees to obtain greenbacks.
The private sector, meanwhile, is still in "wait and see mode," Eurasia's senior analyst for Latin America Risa Grais-Targow said in a note to clients.
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