Fight speculative selling, Venezuela govt tells MercadoLibre
Venezuela's telecoms regulator Conatel has met with the general manager of Argentine e-commerce portal MercadoLibre (Nasdaq: MELI) for Venezuela, Ignacio Caride, with the aim of implementing measures to curb the speculative sale of goods and services via the website, Conatel said in a release.
"Fundamentally, what we've agreed today is a commitment, on the part of the companies involved, to conduct more responsible selling activities by confronting people who we know speculate with determined goods and services, the most emblematic case of which is that of new and used vehicles," Conatel head Pedro Maldonado said.
Caride said that he wants to "refresh the commitment that MeradoLibre.com and car selling portal tucarro.com have with the government and with the Venezuelan public to help curb sales at unreal prices."
The political atmosphere in Venezuela has become increasingly tense in recent weeks. President Nicolás Maduro is in the process of seeking special powers from the country's national assembly to fight widespread corruption and what he calls an "economic war."
It is also necessary to crack down on speculators who are taking advantage of Venezuela's current economic problems through currency speculation, black market operations and the hoarding of essential goods, Caride added.
Analysts have noted that Venezuela's current problems, including the sharp economic downturn following strong growth in 2012, high inflation rates and shortages of basic food and goods could be politically dangerous for Maduro, as there is a limit to the daily hardships that ordinary people can endure.
A recent report from Goldman Sachs (NYSE: GS) suggests that inflation of 5.1% in October, which takes the annualized inflation rate to 54.3%, could "continue to spiral out of control."
Hard currency scarcity fuels devaluation expectations while price controls nurture repressed inflation. Consistent fiscal and monetary policy is needed to correct the situation, however the government has responded by further tightening currency and price controls, which will only exacerbate inflation, the report said.
MercadoLibre saw revenues in Venezuela reach US$23.0mn in Q3, up 92% on 3Q12 at the previous year's exchange rates, the company said in a results release.
However, the company has suffered as a result of Venezuela's currency devaluation in February, with a net devaluation loss of US$6.42mn in the first nine months of this year.
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