Venezuela is preparing to resume sales of dollars, bringing relief to its battered currency after a US oil blockade riled the local foreign-exchange market.

Banks in Caracas contacted corporate clients this week to offer the first significant supply of dollars from the government since mid-December, according to people familiar with the matter who were not authorized to speak publicly. 

The banks are collecting bids, though no funds had been disbursed as of Thursday, one of the people said. 

The move follows the Trump administration’s authorization of two of the world’s largest commodities traders to sell Venezuelan oil. That revived hopes that some proceeds could reach the parched foreign-exchange market, helping stabilize the bolivar after weeks of gyrations. 

Speaking to a group of business representatives later on Friday, Venezuela’s acting President Delcy Rodriguez said that the proceeds from oil sales will be sent through the central bank to private financial institutions to supply the foreign exchange market. 

Alejandro Grisanti, a director at local consultancy Ecoanalitica, said the funds are coming from a trust set up in Qatar to receive oil-sale proceeds. The move helps stave off a potential extreme depreciation in the exchange rate, which “would have left us on the verge of a new hyperinflation,” he said.

The bolivar stabilized in parallel trading on Friday at below 500 per dollar, according to prices posted on crypto trading platforms.

It had swung wildly since the US military began blocking oil exports, which dried up dollar supply and sapped the government of its principal source of foreign earnings.

The situation worsened after the US captured Nicolas Maduro, with the bolivar weakening more than 20% to around 800 per dollar at one point, stoking fears of another currency crisis. 

Source: Financialpost