CADIVI

Comisión de Administración de Divisas (CADIVI)

Territory	Venezuela
Leadership	Manuel Barroso
Founded	5 February 2003
HQ	Caracas
Budget	50 billion USD 2009 (30 billion USD (2010)[1])
Website	www.cadivi.gob.ve

CADIVI (Comisión de Administración de Divisas - Commission for the Administration of Currency Exchange) is the Venezuelan government body which administers currency exchange in Venezuela. Exchange controls were adopted in 2003 to limit capital flight,^[2] in the aftermath of a two-month strike/lockout aimed at toppling the government, which saw GDP fall 27% during the first four months of 2003.^[3]

According to the Bank for International Settlements, "The Central Bank of Venezuela (BCV) fixes a monthly allocation of foreign currency to be administered by CADIVI, purchases foreign currency from residents, and sells foreign currency to the public and private sectors subject to approval from CADIVI."^[4] Under Venezuelan law PDVSA must sell its foreign exchange to the Central Bank, thereby providing the bulk of foreign currency in Venezuela. The Venezuelan private sector requires more foreign exchange for imports than it generates for exports, and is dependent on the Bank to satisfy the difference.^[4]

A similar agency, RECADI, had been set up in 1983, to manage a system of differential exchange rates and capital controls,^[5] and disbanded in 1989 when the differential exchange rate system was abolished.^[6] RECADI saw widespread corruption, and became a substantial scandal in 1989 when five former ministers were arrested, although the charges were later dropped.^[7]

References

1. ^ Budget of Venezuela for 2010 "Venezuela's budget for 2010"
2. ^ CADIVI, CADIVI, una medidia necesaria
3. ^ Jones, Bart (2008), Hugo! The Hugo Chavez Story From Mud Hut to Perpetual Revolution, London: The Bodley Head. p386
4. ^ ^{a b} Bank for International Settlements (2005), "BIS Papers No 24: Foreign exchange market intervention in emerging markets: motives, techniques and implications", May 2005
5. ^ George D. E. Philip (2003), Democracy in Latin America: surviving conflict and crisis?, Wiley-Blackwell. p143
6. ^ Kevin J. Middlebrook (2000), Conservative parties, the right, and democracy in Latin America, Johns Hopkins University Press. p130
7. ^ Damarys Canache, Michael R. Kulisheck (1998), Reinventing legitimacy: democracy and political change in Venezuela. Greenwood Publishing Group. p123