The National Consumer Price Index (INPC) of Venezuela increased by 37.2% in December in monthly terms and year-on-year inflation is now at 305.7%, according to the Venezuelan Finance Observatory (OVF), an independent organization of economic information.

This monthly increase is the highest in the last 20 months and the year-on-year figure represents levels close to hyperinflation.

“It should be mentioned that the pronounced accelerations in inflation that have been registered since September 2022 could place the Venezuelan economy in danger of a hyperinflationary outbreak,” the observatory notes.

Among the groups that reflected the greatest increases in December were clothing and footwear (57.8%), household equipment (55.8%), housing rental (51.8%) and food (49.4%).

In particular, the increases in food prices have hit the lower-income sectors particularly hard, since these goods represent the main expense of this population group.

The prices of the communication and services sector increased below the monthly average (18.6% and 13.5%, respectively).

K.Tovar

Source: Infobae

(Reference image source: freepik, via web)

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La entrada Inflation in Venezuela stands at 305.7% apareció primero en Bitfinance.

Venezuelan President Nicolás Maduro recently assured in an interview that he intends to create a stable exchange system.

In a conversation with the Spanish journalist and writer, Ignacio Ramonet, the president spoke about the economic situation in Venezuela, highlighting the task that he wants to assign to all economic sectors of the country to “defend the value of the national currency“.

“All the economic sectors of the country and the government, we are going to build a stable exchange system, to defend the currency and that the economy works with virtuous circuits from now on,” said the president.

Maduro assured that the exchange system must work directly with the production process and a “virtuous circle that allows having a sufficient assortment of foreign currency.”

In December, the president of Venezuela called on both Venezuelans and all economic agents to “fight” the parallelism in the price of the dollar. This call motivated the Superintendency of Banks (SUDEBAN) to first undertake an inspection and audit in financial entities, in order to avoid distortions in the price of the dollar in the national economy.

K.Tovar

Source: Cointelegraph

(Reference image source: sputnik, via web)

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La entrada Maduro wants a stable exchange system apareció primero en Bitfinance.

The Venezuelan economy in 2021 was characterized by a series of restrictions imposed by the government due to the pandemic. However, for 2022 great challenges are assigned to achieve economic growth in the country.

The main economic challenges for Venezuela for 2022 are:

• Tame inflation

Since 2017, Venezuela has registered the highest hyperinflation in the world, but last year and for 11 continuous months it achieved figures below 50%, placing the country one month away from overcoming hyperinflation. The great challenge of 2022 is to reduce these monthly percentages, but above all to ensure that the prices of products and services do not increase again.

According to the figures issued by the Central Bank of Venezuela, accumulated inflation closed at 631.1%, while the interannual was 1,197.5%. The national government must deal with these figures, which aspires that 2022 will become the year of economic recovery.

• Increase Tourism

Achieving a diversified economy is one of the goals set by the national government, which plans for 2022 to focus its attention on the tourism industry, which is why it is currently developing projects to attract investment and reactivate the tourism sector in the country.

The President of the Republic, Nicolás Maduro, believes that tourism should become the driving force behind the economy, replacing the oil industry. However, this is one of the biggest challenges of the country because this fact also implies overcoming the economic crisis and recovering basic services such as electricity, water, among others throughout the national territory in order to turn the country into a tourist power .

• Revive the national currency

Within the framework of a de facto dollarization, installed as an equilibrium measure for a non-existent price of the bolivar. The biggest challenge for the national government is to recover the value of the bolivar and convert it back into the national reference currency.

The national executive promised, within the framework of the third national conversion that occurred last October, to promote the national currency now called the digital bolívar

• Rescue sports spaces

Venezuela achieved one gold and three silver medals at the Tokyo 2020 Olympic Games, for which the President of the Republic announced the launch of the “Olympic route plan” that will aim to strengthen sports areas for the training of athletes from the country. The challenge of this mission is to recover abandoned spaces and build new buildings, which implies a large financial investment in the infrastructure area.

M. Rodríguez

With information from specialized media in economics

La entrada Venezuela’s economic challenges for 2022 apareció primero en Bitfinance.

The monetary reconversion that came into effect as of today, “will not put a brake on inflation, because the bolivar does not have a way to maintain its value, causing the dollar to become the currency of daily use.” This was stated by the economist Benjamin Tripier.

In his opinion, the Venezuelan government is not carrying out a monetary reform, they are just eliminating six zeroes from the currency. For a reconversion it is necessary to consider some “deeper variables to transform, and incorporate changes, to achieve a stabilization of the currency. With this (reconversion) there is no stabilization or brake on inflation. The bolívar does not gain confidence”, he sentenced.

For Tripier, citizens do not have confidence in the short or medium term in the new denomination of the bolivar because if they do so they will be losing. “Everything will be done is in dollars. Now our currency is the dollar. That an important recognition: allowing the dollar to circulate freely. “

The economist and president of the New Technology business firm, considers that “70 % of liquidity in transactions in Venezuela is made in dollars, and 30 % in bolivars.” But of that 30 %, only 10 %, that is 3 %, is made in bolivars and in cash. “The new cone is to satisfy that 3 %; while for the other 27 %, which is digital, which is done by debit card, the great advantage is the number of zeros that we are no longer going to write,” he explained.

However, he affirms that the reconversion will have a more profound impact because the new bolivar will become the minimum, it does not have cents and in his opinion the public institutions and everything that is associated with the tax unit will have to make adjustments. “It will be adjusted to 1 bolívar (…) I do not think that public institutions and everything associated with the tax unit remain at 0.02 bolívares.”

M. Rodríguez

Fuente: bancaynegocios

La entrada The conversion makes the dollar official national currency apareció primero en Bitfinance.

From this October 1st, Venezuela implements a new monetary scale and a new cone, which also means the elimination of six zeroes from the local currency that will now become the Digital Bolívar.

According to the Central Bank of Venezuela (BCV), the change in monetary scale and the introduction of a digital currency is based on the “deepening and development of the digital economy in Venezuela.”

This week, the executive vice president of Venezuela, Delcy Rodríguez, explained that the monetary reconversion would not imply changes in the value of the bolivar. “We are not affecting the value of the bolivar at all. As of October 1st, the bolivar will continue to be worth exactly the same”, she explained last Monday.

Likewise, she indicated that Venezuelan public and private national banks already have 5 and 10 bolivar bills of the new  monetary cone, which will circulate as of next Monday, October 4, when the banks will open to the public to facilitate transactions related to the entry into force of the new banknotes.

It is not the first monetary reconversion that the Latin American country has experienced in recent years. In 2007 the country decided to eliminate three zeroes from the currency, and in 2018 it repeated the operation, although that time eight zeroes were eliminated from the bolivar.

K. Tovar

With information from Venezuelan media

La entrada Venezuela starts October with a new monetary cone apareció primero en Bitfinance.

The vice president of Venezuela, Delcy Rodríguez, reported that from September 30 at approximately 8:00 pm, and until 6:00 am on October 1st, banking activities will be restricted due to currency reconversion.

This was reported by Rodríguez, during a press conference after having held a meeting with representatives of Venezuelan banking entities.

It is estimated, according to the vice president, that from the morning of October 1st, operations will begin to activate gradually.

On the other hand, Rodríguez stressed that this action within the Venezuelan economy “is not affecting the value of the bolivar; the bolivar will continue to be worth the same”, recalling that one of its objectives is to “preserve the national currency facing the Digital Bolivar.”

K. Tovar

La entrada Venezuelan banking will be inactive soon apareció primero en Bitfinance.

Venezuelan financial entities will not offer regular service to citizens at the different headquarters “main, agencies, branches, offices and ticket offices” on Thursday, September 30 and Friday, October 1st, due to the changes in their platforms for the entry into force of the digital bolivar. This was notified by the Superintendency of Institutions of the Banking Sector (Sudeban).

Antonio Morales, President of Sudeban, highlighted that there are some banks that are presenting “significant delays in terms of currency reconversion.” In addition, he pointed out the presence of some disturbing factors that are limiting progress in the adequacy of the financial system.

That is why they will be calling on the representatives of the different banks to explain the limitations that they are presenting in order to provide the pertinent strategies to solve the situation.

Morales also reported that for Monday, Tuesday and Wednesday of the coming weeks, the bank of Venezuela will be allowing withdrawals at the box office for unlimited amounts. He also stressed that for the next few days they plan to start the distribution of the pieces of the new monetary cone to the different financial entities of the country.

The Deputy Minister of Finance, Román Maniglia, said that only six financial entities in the country obtain 80 % of the deposits from the public and he considers that this should be extended to other banks. “The idea is that the banks do business, we are going to analyze what are the obstacles they are having” and added that the banks must undergo “a capitalization process in the coming months.”

M. Rodríguez

Source: finanzasdigital

La entrada Venezuelan banks will adjust platforms to new monetary expression apareció primero en Bitfinance.

The value of the products and services in the market, in view of the users, must be expressed in the sovereign and digital bolivars as of this first of September. This was reported by the Central Bank of Venezuela (BCV) through its official account on the social network Twitter.

According to indicated by the issuing entity, the entry into force of the new monetary expression will not have any impact on prices. That is, it will not affect the value of the currency. “It will not be worth more or less. It will just facilitate its use by taking it to a simpler monetary scale.”

The state financial entity indicated that “all monetary amounts and everything expressed in national currency will be divided by one million.” It stressed that the modification of the monetary scale will underpin the “deepening and development of the digital economy in Venezuela” becoming a “necessary historical milestone at a time when the country begins the path of economic recovery.”

It is important to remember that last August 5, the BCV announced the new monetary reconversion in the country that will take effect from October 1st, with the digital bolivar, eliminating six zeros from the current coin.

M. Rodríguez

Source: descifrado

La entrada Prices must be expressed in sovereign and digital bolívar from September 1st apareció primero en Bitfinance.

Venezuelan inflation has been decelerating compared to previous years. It is estimated that by the end of 2021 it will close at levels close to 1,400 or 1,500 %. This was stated by the CEO of the consulting firm Aristimuño Herrera & Asociados, César Aristimuño, who believes that next year could be much better as long as an appropriate legal framework is granted to the dollarization process that the country is experiencing, which has no reverse because it is society itself that has imposed it.

“We are observing that the rise in prices of products in dollars is moving much less than what they are rising in bolivars, and that will become more and more regular to the extent that stability is granted to the dollar as a unit of account, as a means of payment, as a store of value, with all the functions that money actually fulfills,” said the economist.

According to his analysis, if the dollar begins to behave in a “more transparent manner”, the transactions, contracts and agreements that are made with this currency will precipitate. There should be clearer rules “that companies can bill in dollars without problems, that there is no uncertainty of knowing whether or not it is legal. We are sure that, if that happens, inflation next year will register a very accelerated fall.”

The representative of the consulting firm highlighted: bank deposits in foreign currency already represent 61 % of deposits and that will continue to rise. We foresee that at by the end of the year it could be between 75 or 85 % of the total deposits” of the national financial system.

He additionally pointed out the existence of a working capital in the national economic market that ranges from 3,000 to 5,000 million dollars, which represents a fairly considerable figure and is favorably impacting the environment because it gives it greater stability.

Digital Bolívar

The economist Aristimuño considers that the digitization of the currency is a worldwide movement, as a consequence of technological development. Hence, the means of digital payments such as credit and debit cards, transfers or mobile payments will increase every day, at the same time as physical money, bills and coins, will disappear from the global economy.

That is why the news about the digital bolívar does not surprise anyone. “That is a process that is going to deepen,” he pointed out. Although in the country financial entities continue to issue cash for some time, the inhabitants will use it less every day.

M. Rodríguez

Source: bancaynegocios.com

La entrada Venezuelan inflation could close between 1,400 and 1,500 % by December apareció primero en Bitfinance.

Asdrúbal Oliveros released, this August 10, a video on his social networks, explaining the perspectives of the consulting firm Focus Economics on the dynamics of the Venezuelan economy for the last months of 2021 and for the next year 2022.

According to what was expressed by the economist, the firm estimates that by the end of 2021 the economy will register growth in the order of 3.3 % year-on-year. Additionally, he foresees that consumption in private companies will reach only 0.3 %. “With regard to the fiscal deficit, Focus Economics believes that at the end of the year it will be 11.5 points.”

Concerning inflation, the firm estimated that at the end of 2021 it will be around 1,549 %, while the price of the dollar will be located at 14.2 digital bolivars, the one that will come into effect as of October 1st this year, according to what was published by the Central Bank of Venezuela recently, which is equivalent to about 14,200,000 bolivars today.

2022 projections

The polling firm considers that by 2022 the Venezuelan economy will register a growth quite similar to that estimated for the end of this year, reaching 3.3 %. However, it projects significant private consumption, achieving growth of 8.4 % at the end of next year.

It also outlines a slight reduction in the fiscal deficit, placing it at 10.2 points by the end of 2022. While inflation could drop significantly to close at 746 %, but the price of the dollar is projected for December of next year at 132.5 new bolivars, that is to say about 132,500,000 of current bolivars.

M. Rodríguez

Source: bancaynegocios.com

La entrada Focus Economics estimates that inflation will close the year at 1,549 % apareció primero en Bitfinance.