Venezuela Raises Dollar Allotment for Some Travelers

Nov. 30 (Bloomberg) -- Venezuela increased the maximum amount of dollars that individuals can buy for travel to $3,000 from $2,500, and slashed the allotment for travel to neighboring Colombia 72 percent amid a deterioration of relations.

The Foreign Exchange Administration Commission, known as Cadivi, will sell a maximum of $3,000 annually at the official exchange rate of 2.15 bolivars per dollar to individuals for trips of eight days or more to Asia, Africa or Europe. Travelers to Colombia will be allowed to buy no more than $700 per year, according to a resolution published in the Official Gazette.

“They’re trying to tighten the regulations, but in the end people will find ways around it,” said Boris Segura, a Latin America analyst at RBS in Stamford, Connecticut, in a telephone interview. “With Colombia, there’s an added political implication.”

As part of currency controls established by President Hugo Chavez in 2003, Venezuelans must seek approval from the government to buy dollars at the official exchange rate. The government slashed allotments to travelers in half last year after oil revenue plunged from a sharp drop in prices.

Venezuelans who are unable to gain approval to buy dollars from the government, turn to the parallel currency market where the bolivar traded at 5.50 per dollar on Nov. 27.

Chavez “froze” relations with Colombia in July in protest over a deal to allow U.S. troops access to seven military bases for counter-narcotics operations. Chavez says the agreement threatens Venezuelan sovereignty.

Individuals traveling to countries that belong to Chavez’s political bloc, known as ALBA, which includes Cuba, Nicaragua, Bolivia and Ecuador, will be allowed a maximum of $2,500 per year. The $2,500 limit also applies to U.S. travel.

Travelers to Panama and most Caribbean islands will be capped at $1,000 per year, according to the resolution.

The allotment for Internet purchases will remain unchanged at $400 per year.

Source: bloomberg.com/