Maduro says Venezuela could auction $900 mln a week


CARACAS, Oct 10 (Reuters) - Venezuelan President NicolasMaduro said on Thursday the central bank could sharply increasethe amount of dollars it offers at auction if lack of hardcurrency for businesses continues to cause economic problemsnext year.

The central bank says it has allocated a total of $859million over the last seven months through four auctions of anew foreign exchange mechanism, known as Sicad, which is meantto complement decade-old currency controls.

The auctions are aimed largely at local importers whocomplain that lack of access to dollars has caused shortages ofconsumer goods ranging from flour and car parts to toilet paper.

During a televised meeting with the army's high command, thepresident said the central bank could offer more than $900million every week, drawing loud applause from his audience.

"The dollars the fatherland needs to function are completelyguaranteed, without problems, up to Dec. 31," Maduro said.

"If it goes beyond that, I've decided, perfecting Sicad, tooffer via Sicad an amount of not less than $900 million a weekto complement whatever needs the economy might have."

It was not clear what criteria would trigger the much largerand more frequent auctions, and Maduro gave no other details.

Trade groups representing business sectors given priority toreceive funds in the Sicad auctions so far say they have no ideawhere most of the $859 million went.

The government says currency controls - a cornerstone ofVenezuelan economic policy since 2003 - have been exploited forbillions of dollars for fictitious exports by shell companies.

Set up by Maduro's predecessor Hugo Chavez to stop capitalflight and inflation, the controls offer big profits for anyonewho can buy dollars at a preferential rate and then resell themat some seven times that on the black market.

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