The Foreign Minister of Venezuela, Jorge Arreaza, assured in a recent interview that the use of the US dollar for commercial transactions in his country will be “temporary.” The official highlighted that the objective of the government of Nicolás Maduro is to revalue the bolivar, the national currency.
Arreaza admitted that he does not know how long it will take the country to strengthen its monetary sign . Speaking to the AFP news agency, the foreign minister said that the rescue process could last years, something that would be carried out in conjunction with the Central Bank of Venezuela (BCV).
«It is not what ideal and will be temporary how long will it last? One, two, three, four years? Our goal is to reposition the bolivar. One thing is that trade is dollarized and another that we are ducking in front of the Federal Reserve asking them for dollars, “explained Arreaza quoted by the Caracas daily El Nacional.
For Arreaza it is” paradoxical “that in the streets of Venezuela more dollars are obtained than bolivars , something that would be clashing with the principles of monetary sovereignty that the socialist government has raised for years.
The situation was justified by Arreaza by saying that the US sanctions against government officials are affecting. In addition, he mentioned that, geographically, Venezuela is in the “geopolitical area of control of the United States.” According to the Foreign Minister, 77% of the country’s commercial transactions, in 2020, were carried out in bolivars.
Economic and monetary crisis in Venezuela
Venezuela experiences an acute economic crisis that has in hyperinflation, the devaluation of the bolivar and the shortage of money and cash , to its three main protagonists. Venezuelans, in an attempt to preserve the value of their funds, charge and pay for most products and services in dollars , even if it is not the official currency.
According to a study released by the Ecoanalítica firm, the use of the dollar triples that of the bolivar as a means of payment. In its most recent investigation, on dollarization in Venezuela, the agency indicated that 90% of operations are carried out in foreign currency. In fact, 61% of payments in the country are made with cash dollars.
In the border area with Colombia, for example, there is a somewhat different reality with millions of Venezuelans paying with the currency of the neighboring country, the peso , rather than using the bolivar itself or the dollar. A similar situation occurs on the border with Brazil, where the predominant currency for operations is the Brazilian real, as reported by CriptoNoticias.
Another segment of Venezuelans has found refuge in bitcoin (BTC) and other cryptocurrencies as an alternative to safeguard capital. In fact, the country would already be the third with the highest adoption of crypto assets, according to a report by the firm Chainalysis.
In November of last year this newspaper reported that Venezuela would have discussed a dollarization plan with the private banks. Months later, some of the institutions began promoting new accounts in dollars and custody services in foreign currencies.