Saturday 12 June 2021

Venezuela Ditches the Greenback, Switches to Euros and Yuan: Consequences?

Venezuela will switch to international payments in euros or yuan, while the US dollar will cease to be the base currency amid the financial blockade imposed on the country by the administration of US President Donald Trump.

The decision announced by Economy Vice President Tareck El Aissami, is aimed at speeding up the country’s economic growth.

- Advertisement -

“This is a measure that took a long time implementing. It is Venezuela’s response to US attacks on our country’s economy,” Venezuelan economist Raul Penaloza told Sputnik.

Penaloza, who is a teacher and researcher at the Venezuelan Center for the Study of the Economic Situation (OVRE), welcomed the initiative which he said would stimulate businesses and individuals with foreign accounts that they can no longer use in transactions.

“A switch to an alternative European or Asian system will definitely simplify trade and give a positive result in the shortest possible time,” the expert explained.

Raul Penaloza also believes that the decision will reduce Venezuela’s technological dependence on the United States.

- Advertisement -

“The Venezuelan market will be able to reorient itself to the European and Asian markets for technologies, spare parts and goods. As a result, the US influence on the region will weaken,” he noted.

This is going to be a bumpy road for Venezuela though the most obvious hurdle is the need to stop using bank accounts opened in the United States or managed with US mediation.

“A large number of Venezuelan importers and exporters have foreign accounts in the United States or in its satellites, such as Panama. This will cause small delays before enterprises and the entire system, both public and private, is reoriented to Europe or Asia,” Penaloza continued.

To prevent possible speculation with new base currencies, the authorities have announced an increase in reserve requirements.

The minimum share of funds that commercial banks are required to keep in the Central Bank will increase from 31 to 40 percent. As a result, the amount of money in circulation will decrease along with the possibility of speculation.

Since winning another six-year term, Venezuelan President Nicolas Maduro has promised to bring about economic recovery. Still, the government has struggled to attract much needed investment amid a raft of sanctions on Venezuelan debt and its problem-ridden oil sector.

- Advertisement -

Article originally appeared on Today Venezuela and is republished here with permission.

- Advertisement -

We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

Related Articles

Are the days of the US dollar below ¢600 no more?

QCOSTARICA - The last time we saw the dollar exchange below...

Bolsonaro compares quarantines to Maduro’s dictatorship

Q24N - Brasilia (EFE) The president of Brazil, Jair Bolsonaro, said...


Estadio Nacional

QCOSTARICA - The multipurpose national stadium, the first modern sport and event arena to be built in Central America, located La Sabana. The stadium was...

eHow to Become Successful in Online Casino Betting 

To become a successful gambler in the online industry, there is a lot to cover. It can be known to be a vastly different...

Puntarenas is the only province with a covid-19 infection rate greater than 1

QCOSTARICA - Puntarenas is the only province in the country that has a contagion rate or "r" rate greater than 1. This is detailed in...

Costa Rica will have a system to reduce marine pollution

QCOSTARICA - Costa Rica will have a system called "Interceptor" that will eliminate floating and suspended waste from the upper layer of its waters,...

New Television Program To Promote Family Fun

Q ENTERTAINMENT - Attention families of Costa Rica! A new contest program, led by Douglas Sánchez and Verónica González, is looking for participants who...

Tilaran, where the wind blows

QCOSTARICA - For years, Tilarán has seen the transit of tourists heading towards Lake Arenal, the homonymous volcano and La Fortuna or towards Monteverde. At...

Bus stops could be a covid-19 contagion bomb

QCOSTARICA - It's five in the afternoon on any given Wednesday in San José. Hundreds of people returning to their homes begin to crowd...

Today’s Covid News: Contagion rate in Costa Rica remains unchanged in the last week

QCOSTARICA - The contagion rate of covid-19 in Costa Rica in the last week did not change, a fact that is seen for the...

Today’s Vehicle Restriction: June 10, “ODDS”

Today, Thursday, June 10, only ODDS can circulate. The measure is countrywide and applied between 5:00 am and 9:00 pm, save for those under the...


Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Article originally appeared on Today Venezuela and is republished here with permission.

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.