Venezuela could face problems in the sale of foreign currency

The conflict between Russia and Ukraine could affect the sale of foreign currency in Venezuela to contain the exchange rate

Asdrúbal Oliveros, economist and director of Ecoanalítica, stressed that the relationship between the governments of Russia and Venezuela could impact the sale of foreign currency in Venezuela to contain the exchange rate because the country uses “the Russian financial system to triangulate the operations of collection or sale of crude oil.”

The economist recalled that the Venezuelan government required the support of allied countries and “Russia has been fundamental for Venezuela due to the size of its financial system“, which provided the “financial floor”, as well as “cash currencies” to the Caribbean country.

According to the director of Ecoanalítica, the Venezuelan government “charges in cash in dollars or euros” for a large portion of the products (gold or oil) it sells, and much of that money is managed between “Russia and Turkey.” However, with the financial sanctions imposed by the United States and Europe on Russia, “the question remains as to what the provision of cash payments that Venezuela receives will be like,” which could affect the “selling of foreign currency made by the Executive to contain the rate exchange.”

Isolation of Russia

Oliveros said Russia is being isolated due to the severe financial sanctions. “They are even more aggressive than those that Venezuela can have”, thus the Venezuelan government must modify “the strategy to be able to receive foreign exchange in cash by the sale of oil.

Additionally, Oliveros believes that the conflict between Russia and Ukraine will have repercussions on the country, because it will limit the country’s “economic recovery capacity.”

M. Rodríguez


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