Reuters: US Dollar Report: PDVSA seen benefiting from new Venezuela forex rules

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

PDVSA seen benefiting from new Venezuela forex rules Jul 23rd 2012, 18:50 Tweet Share this Email Print Related Topics Currencies » Markets » Energy » Financials » Mon Jul 23, 2012 2:50pm EDT * Move lets exporters sell some dollars at higher rate * OPEC nation applies strict, complex currency controls By Marianna Parraga CARACAS, July 23 (Reuters) - Venezuela's state oil company PDVSA could see its income boosted by hundreds of millions of dollars this year after President Hugo Chavez's government loosened the South American country's tight currency controls. Under new rules published on Friday, state-run companies can use 5 percent of their dollar income from exports to get bolivars from the central bank's Sitme system at a rate of 5.3 to the greenback, higher than the official rate of 4.3. The government has not said yet whether PDVSA will take part in the new system, but Caracas-based think tank Ecoanalitica calculated the change would translate into extra revenue for the company of more than $260 million during the rest of this year. "It brings relief to PDVSA and could be a test to increase the portion of its dollars that can be sold at 5.3," Asdrubal Oliveros, a partner at Ecoanalitica, told Reuters. "With oil prices stuck, this move favors PDVSA's finances." PDVSA made a profit of almost $4.5 billion on record revenue of $125 billion last year, while it doubled its funding of government programs to nearly $50 billion. Its debt to suppliers increased to more than $12 billion, from $10 billion in 2010. Chavez is seeking a new six-year term at an Oct. 7 election and has been increasingly leaning on PDVSA to serve as the financial motor of his self-styled socialist "revolution". Analysts say the latest change to the complex currency controls system could reduce the need for the company and Chavez's administration and to issue more of their highly-traded debt this year - but not cut it completely. "Local analysis estimates that the new regulations could add a maximum of $1.4 billion in funds to SITME in 2012, less than one-half of the demand of foreign exchange expected this year," the Economist Intelligence Unit said in a report. A top central bank official told Reuters in May that Venezuela could sustain its Sitme system for more than a year without new global bond issues, thanks to regulatory changes that had boosted its liquidity. Venezuela's government and PDVSA issued bonds worth $17.5 billion last year, with coupons of up to 12 percent, in part to supply to Sitme. The system was set up in 2010 as a secondary mechanism to the main exchange control agency the government launched seven years earlier to limit capital flight. Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions