March 9, 2016 / 4:57 PM / a year ago

Venezuela's new dual forex rate to start on Thursday

Venezuela's Economy and Productivity Vice President Miguel Perez Abad talks to the media during a news conference at the headquarters of the Venezuela's Central Bank in Caracas March 9, 2016.Carlos Garcia Rawlins

CARACAS (Reuters) - Venezuela's new dual foreign exchange system, with one rate fixed at 10 bolivars to the dollar and another "floating" at a starting rate of 206 bolivars, will come into operation from Thursday, the vice president for economy said.

Miguel Perez, speaking at a news conference on Wednesday, reiterated that the OPEC nation's socialist government was "religiously" honoring foreign debt payments and did not have solvency problems despite the current "economic emergency."

Venezuela last month made a $1.5 billion debt payment, but investors are fretting as to whether it will be able to pay state oil company PDVSA's heavier obligations later in the year.

"Venezuela does not have a solvency problem," Perez said. "We have a cash-flow problem."

The official said details of the new foreign exchange mechanism would be published on Thursday, meaning the system would come into being from then.

The 10 bolivar rate at the newly-named Dipro system would be used for priority food and medicine sectors, Perez said.

A cashier counts bolivar notes at a butchery in a public market in Caracas, Venezuela January 22, 2016.Marco Bello

The second, complementary system would be known as Dicom, he added, and would apply to most other areas, including the oil sector and - a controversial subject locally - foreign currency for Venezuelan tourists or students abroad.

The Dicom rate would start at 206 bolivars to the dollar, the same as the current Simadi mechanism, but then "fluctuate according to the country's economic dynamic," he said.

Venezuela previously had a three-tiered official currency control system.

On the black market, greenbacks currently fetch 1,145 bolivars, according to the widely-tracked DolarToday web site.

Critics note that the government has repeatedly announced "free-floating" systems that withered away precisely because authorities never allowed them to be determined by demand.

Currency and price controls have been a major factor in Venezuela's current economic mess, which includes snarling food lines, widespread shortages, and a lucrative smuggling trade.

Reporting by Brian Ellsworth and Deisy Buitrago; Writing by Andrew Cawthorne; Editing by Girish Gupta and Alistair Bell

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