CARACAS, Friday November 23, 2012 | Update

Venezuela's liquid reserves down 60% in nine months

For the third consecutive day, the Central Bank did not supply US dollars through the Transaction System for Foreign Currency Denominated Securities (Sitme)

Two thirds of the country’s international reserves are in gold. The country has never sold gold to obtain US dollars in cash (File photo)
Friday November 23, 2012  11:37 AM

In a scenario where the Government has decided to keep half of Venezuela's petrodollars in funds where a parallel budget flows, the Central Bank's liquid reserves, that is, US dollars for the payment of immediate imports and foreign debt, fall constantly.
According to official data, by the end of the third quarter liquid reserves accounted for USD 2.2 billion, 60% below the figure recorded early in January and 93% below that in 2008.

The Central Bank of Venezuela (BCV) relies on liquid reserves to distribute them among companies duly registered with the Foreign Exchange Administration Commission (Cadivi) so they can pay imports. Thus, the fall in liquid reserves implies few opportunities and delays to respond to requests at a time when imports are fundamental to meet domestic demand.

By the third quarter of this year, companies from the private sector suffered a 4.9% cut in the supply of US dollars for imports. 
Venezuela's international reserves account for USD 25.4 billion, yet two thirds of the total amount are in gold. The country has never sold its gold, and since it was transferred to Venezuela it is more difficult to trade it on the foreign market.

Sitme depleted

Although it has not been formally announced, the Central Bank has virtually closed the Transaction System for Foreign Currency Denominated Securities (Sitme). The system has been created to supply US dollars to companies unable to receive money through Cadivi. The foreign exchange rate through Sitme is VEB 5.30 per US dollar and the money is supplied through a bond sale.

On Thursday, for the third consecutive day, the BCV did not offer bonds, limiting companies in the US dollar supply. As a result, companies, which had averagely obtained USD 44 million per day, received USD 14.3 million after the state-run Venezuelan Bank for Economic and Social Development (Bandes) sold a small portion of its bonds.

Translated by Jhean Cabrera
Gagging Twitter users

Pablo Jiménez Guaricuco was summarily dismissed from his Clerk III job at the Autonomous Service of Public Registries and Notaries' Offices (Saren). He read a notice published in a newspaper on November 5 informing the public that he was no longer employed to the Saren. He was sacked despite the fact that he was taking a leave of absence from work due to a work-related accident, and that he enjoyed security of employment under the parental job-immunity privilege. Most probably, the decision was influenced by his role as a union organizer. But what did he do, besides leading protests, to deserve the sack? Well, he allegedly sent off a series of tweets that definitely hurt the sensitivity of the Saren Directorate.

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