Venezuela unveils new foreign exchange system to ease currency controls amid economic crisis

Venezuelan officials say they will allow a free-floating exchange rate for the country's battered currency while maintaining a subsidized rate for key imports.

The socialist South American government has been struggling to maintain currency controls even as inflation has soared with heavy public spending. Now the falling price of petroleum is slamming the oil-based economy.

The government sells dollars for the most crucial imports at rates of 6.3 or 12 bolivars, demanding that retailers hold down prices to reflect the subsidies.

But many people have no access to those rates and have had to turn to an illegal black market, where the rate has been about 185 to one.

The new system announced Tuesday should allow greater access to dollars, but at a far higher price than legally possible before.