YEREVAN, February 11. /ARKA/. Venezuelan officials unveiled Tuesday details of new changes in the country's foreign exchange policy, Prime reports.

Venezuela’s government has announced ​that it will allow a free-floating exchange rate for the country’s battered currency though maintaining a subsidized rate for key imports.

The government said that it would continue to operate with a three-tier exchange rate system, and that the primary rate of 6.3 bolivars to the dollar would remain in place for imports that are deemed essential, including food, medicine and agricultural supplies.

Finance Minister Rodolfo Marco Torres was quoted by La Segunda as saying that it will be “a totally free system where there will be sellers and buyers of hard currency. The market itself will set the rate.”

“Approximately 70 percent of the needs of the country’s economy is guaranteed at 6.3,” said Rodolfo Marco Torres, the finance minister, who announced the changes to the foreign exchange system.

Economists say that the bolivar at 6.3 to the dollar is heavily overvalued and has exacerbated distortions in the economy, including high inflation and shortages of basic goods. The dollar has been trading on the black market for about 190 bolivars.

A devaluation could help ease the government’s budget deficit, but it could also further feed inflation by making some imported goods more expensive. --0--