Venezuela reiterates that it stops using the dollar as its reference currency

Venezuela reiterates that it stops using the dollar as its reference currency



The Venezuelan government reiterated today that it will stop using the dollar as a reference currency for its foreign exchange operations, a measure that was announced more than a year ago in response to the financial sanctions imposed by the United States on Venezuelan officials and institutions.

The economic vice president of Venezuela, Tareck El Aissami, told reporters today that his country will use "the euro and other convertible currencies" as the reference currency "in all transactions" of the national exchange market.

This same measure was announced by El Aissami itself in September 2017, when the Government indicated that it was moving towards the implementation of "a new international payment system" alternative to the dollar, through a "basket of currencies" such as the yuan, the ruble, the rupee and the euro.

The Aissami said today that the US government imposed new sanctions "that block the possibility of continuing to trade in the Venezuelan exchange market in the currency called the dollar", and described these restrictions as illegal, arbitrary and contrary to international law.

"Foreign exchange operations have been affected (…), no country, except Cuba, has suffered an attack of this magnitude, multiform attacks," he added.

Since 2003, a rigid exchange control has been in place in Venezuela, which limits entrepreneurs and individuals to access foreign currency, which is necessary for the acquisition of raw materials, drugs and food.

At present, the official exchange market of Venezuela works through an auction system, whose results stopped being expressed in dollars for months.

The Aissami said that the Government of Nicolás Maduro will offer in the months of November and December about 2,000 million euros, an announcement that implies the return of the State to an avid currency market.

"(They will) have currencies at a real rate, not criminal," he said, referring to the dollar's price, which triples the official rate in the parallel market.

Venezuela has been experiencing a severe economic crisis for five years, which translates into shortages and hyperinflation.

To combat this crisis, Maduro decreed almost two months ago a package of measures that include tax reform, freezing basic basket prices and increasing the minimum wage by 35 times its value.

However, analysts and opponents point out that the measures are impertinent, incomplete and do not attack the root cause of the ills of the country's economy with the largest proven oil reserves on the planet.

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