Ibrahím Velutini analyzes economic measures in Venezuela
The economist, CEO of Intelinvest, feels positive that the autonomy of the BCV has been restored
During the first half of September, the National Executive announced the launch of a series of measures framed in an “Economic Recovery Plan”, which aims to improve the financial stability of the nation, as announced by President Nicolás Maduro.
We interviewed the economist, capital market specialist and CEO of Intelinvest, Ibrahim Velutini, to know his opinion on such measures. Velutini explains that these announcements have “good things and bad things”.
Some of the positive aspects with respect to the announced free convertibility of the currency are “the fact that autonomy has been returned to the Central Bank of Venezuela (BCV) after 15 years, that the treasuries can be centralized in it as appropriate and allowing banks the possibility of carrying out operations in foreign currency,” the spokesperson points out.
Despite the importance of the BCV taking back its role of centralizing all operations of this type, it must be taken into account that “what cannot be done is to use that institution to give loans to entities of the State that in the end what they do is inject more money into the system, increasing the size of the monetary base and accelerating inflation.”
The economist and CEO of Intelinvest emphasizes that the negative aspect that also shows the announced plan is “who determines the price” of the currencies. He adds that it is necessary to know “if the BCV will really allow the market to float and it is the latter who determines its price according to demand and supply. However, for now, he does not see that this is contemplated.
Ibrahím Velutini complements the idea and explanation indicating that the “National Government has no offer of dollars, but what remains is a very big demand”, for what the State has the fear of injecting money and that there occur a capital flight.
It is interesting that for the first time President Maduro has been talking about the fiscal deficit. That is probably one of the most important points of his message regarding the new measures.
The State talks about fiscal deficit
“One interesting thing is that for the first time President Maduro has been seen talking about the fiscal deficit and that is probably one of the most important points” of his speech, given that it is “recognition that monetary expansion is probably the great culprit of the hyperinflation we have,” says Velutini.
However, for the CEO of Intelinvest, the general increase in salaries was not done correctly, like “freezing prices without allowing them to adjust” in the market.
An interesting audio-interview follows this note, in which the economist Ibrahím Velutini also talks about the legal reserve of banks.
Source: DobleLlave
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