Venezuela: Maduro changes banking rules and moves towards dollarization of the economy

Venezuela widens the use of foreign currency bank accounts, the most recent step towards dollarization of the economy, so struck by the crisis.

“The opening of accounts at all levels in convertible currencies is authorized, in Dollars»Said the president Nicolas maduro during his annual address to the nation.

While the Venezuela economy I know contracted for the seventh consecutive year in 2020, the government has turned a blind eye to growing number of dollar transactions and relaxed controls who restricted the private matter. They entered more than $ 2 billion in remittances And now there is a plentiful supply of products for those with access to foreign currency.

Local banks can already offer Accounts in US dollars, but transactions are limited due to the lack of a clearing system allowing electronic transfers of funds between different banks. The proposal of Mature would allow the widespread use of debit cards logged into these accounts.

Venezuelans will now be able to pay in bolivars with debit cards from your dollar accountsMaduro noted. Dollarization of the economy it is a necessary and beneficial exhaust valve for economic life, the president said.

Because a annual inflation of 1858%, bolivar banknotes are losing value in record time, increasing the need for digital payments and currencies to facilitate transactions.

Maduro said that over the past six years, Venezuela lost 99% of its foreign exchange earnings; and set the oil production target for 2021 at 1.5 million barrels per day, or 500,000 barrels per day below the country’s 2020 target.