The government is reportedly planning to stop providing foreign currency to import fuel and handover the responsibility to private companies, Bloomberg reports.
According to the publication, the plan to stop providing forex to importers which will end the fuel subsidy could take place this week, after the Foreign Currency Auction Trading system kicks off.
The publication quoted unnamed people and said:
The plan, which will end an effective subsidy, will take place as early as June 23 when a currency peg is removed and an auction system for foreign exchange is set to begin, the people said, asking not to be identified because a public announcement hasn’t been made. The plan may be implemented a week or two later when its clear how the new system is working, one of the people said.
The move is an attempt to save the government $100 million of foreign exchange. The country has been beset by persistent fuel shortages as the central bank doesn’t have the money to pay for adequate imports.
The government has remained mum on re-dollarisation as removing the fuel subsidy might effectively expedite re-dollarisation as fuel traders will probably start selling fuel in forex.
More: Bloomberg
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