Petrodollars to raise forex supply in Venezuela by USD 10 million per day
Venezuela's domestic market is in need of higher US dollar supply
By doing this, the BCV will be able to sell more US dollars to companies upon authorization granted by the Foreign Exchange Administration Commission (Cadivi). However, will the increase be enough to put and end to the shortage of US dollars on the market?
It all seems that although the move is a pressure relief valve, a lot more is required. Think tank Ecoanalítica's CEO Luis Saboin explained that upon the implementation of the decision, Cadivi would be able to increase its daily US dollar sales oriented to imports, traveling, and remittances by USD 10 million. However, this is certainly not a significant change.
If Pdvsa fully transfers to the BCV the expected amount of money, US dollars for imports would increase by 9% this year. However, since imports continue growing, it may not be sufficient.
In 2012, imports jumped to USD 56.35 billion, the highest figure in 16 years, and amounted to 59% of Venezuelan export revenue.
Via Cadivi, companies purchase dollars to import basic commodities such as food and drugs. Companies importing other products rely on the Transaction System for Foreign Currency Denominated Securities (Sitme), which sells USD dollars through bonds.
Notwithstanding, a sharp drop in the daily sale of US dollars via Sitme was reported late in 2012, from USD 44 million per day in January-November to USD 15 million per day in December.
Translated by Jhean Cabrera
President Nicolás Maduro is not only the heir to the throne, but also to an economic crisis which demanded urgent measures to rectify the course. The crisis showed up in two aspects: a 50% inflation estimate, and shortage of staples ranging between 70% and 98%. These issues might hit the President's poor popularity; considering his feeble electoral victory of 1% over his challenger.