Venezuela announces measures to revive its currency, devalued almost 80% in November

The government of Nicolás Maduro seeks to stop the soaring of the dollar.

The Venezuelan government announced early this Wednesday a set of measures with which it hopes to revive the national currency, the bolivar, after in the last four weeks it was devalued by about 80% and reached a price of one million units per American dollar.

The Venezuelan president, Nicolás Maduro, “has decided on a set of actions to protect the people and strengthen the use of our national currency, against exchange speculators,” Executive Vice President Delcy Rodríguez said in a series of messages on Twitter.

Among those decisions, he explained, are the expansion of the daily amounts allowed for bank transfers that are carried out through digital platforms, which currently stand at around 100 million bolivars, about 100 dollars according to the official price.

“The limits of these electronic transactions will be continuously updated so that those who have resources in bolivars can easily use them,” the vice president remarked, noting that these measures will be implemented by the Superintendency of Banks (Sudeban).

Although until now it is unknown how much the daily limits will rise, Rodríguez said that the increase will be “considerable.”

Also the Sudeban, “in order to invigorate the use of the bolivar”, will increase the limits of daily payments with debit cards, although no change in bank credit is contemplated, a sector practically dead by dispositions of the Executive.

“Transactions in foreign currency within a financial entity will pay a transactional tax higher than the tax on large financial transactions of operations in bolivars,” the vice president continued, without further details, although she indicated that the law that governs these aspects will be reformed.

In addition, the government will enable “commercial allies” of the exchange houses “in order to increase the options to carry out foreign exchange operations in national currency.”

According to the Central Bank (BCV), the bolívar has devalued almost 78% so far this month, but the price of the parallel market, which governs almost all commercial operations in Venezuela, shows that the Venezuelan currency has depreciated close to 90% against the dollar during November.

The bolivar has gone through two processes of currency reconversion: in 2008, it lost three zeros and was renamed bolívar fuerte, while, in mid-2018, another five zeros were subtracted with what was renamed the current sovereign bolívar.

Faced with this instability of the local currency, Venezuela is experiencing a de facto or “spontaneous” dollarization process, with which most of the products offered for sale are calculated in dollars, and there is the possibility of paying in foreign currency or in bolivars.

Source: EFE

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