Venezuelan inflation could close between 1,400 and 1,500 % by December

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