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  HOME | Venezuela (Click here for more Venezuela news)

As Venezuela's Reserves Crater, So Does Caracas' Currency and Economy
The bottomless pit of the Venezuelan economy under Maduro



By Carlos Camacho

CARACAS -- The US dollar has stabilized in the black market after Tuesday’s ratification of Juan Guaido as President of the National Assembly and acting President of Venezuela, but the parts of the Venezuelan economy still under the direct control of the Nicolas Maduro regime continue sinking.

The greenback scaled back from the Bs 78,000 it reached on Monday, to around Bs 60,000 Wednesday, the first day after Guaido asserted himself, again, as President of the National Assembly, the sole elected Constitutional power recognized by the United States and the international community.

Meanwhile, the country's international reserves remain a basket case.

The foreign reserves with the Central Bank of Venezuela dropped on January 2nd to their lowest levels since 1974, to $6.63 billion, according Russ Dallen at Caracas Capital. That’s the lowest in 45 years, since the end of the Vietnam war, oil nationalization and after the all-time record high of $42.46 billion in 2009.

Worse, it is lower than almost all the other countries in South America, Caracas Capital points out in a new report.

"By way of comparison, Colombia next door has $50.4 billion in foreign reserves," says Dallen. "Neighboring Brazil has $356.1 billion. Mexico has $173.1 billion. Peru has $63.5 billion. Chile has $39.4 billion. Beleaguered Argentina has $37.9 billion. Uruguay has $14.016 billion. Even Guatemala ($14.6 billion), Costa Rica ($7.7) and Paraguay ($7.12) now have more foreign reserves than Venezuela. Saudi Arabia, with less oil than Venezuela, has $489.1 billion, which is where a well-run Venezuela should be."

Not only are the reserves at its lowest levels since Led Zeppelin was still touring but hyperinflation is entering its third year and the Bolivar has lost almost all of its value through daily devaluations and Maduro-promoted explosive liquidity.

In spite of its slight recovery between Monday and today, the Bolivar is still at its weakest ever against the dollar, gasoline is in short supply and fresh funds are not forthcoming.

The basic monthly wage now amounts to just $2 a month.

Revenge of the Twitter Bots

Not only that, but the Central Bank’s official Twitter account, with 100,000-plus followers, was suspended Tuesday night, together with another 20 such accounts connected to the Maduro administration, including that of the joint chiefs of staff of the armed forces (CEOFANB), and of every major branch of the military, including the leading force in political repression, the National Guard. Key chavista figures such as Freddy Bernal (an ex-cop that is now acting as pro-Maduro enforcer in the border with Colombia), the mayor of Caracas Erika Farias and Falcon state governor Victor Clark.

The suspended accounts automatically and routinely retweeted Maduro’s threats and verbal attacks against the opposition.

Venezuela's Information Ministry called Twitter's action a "media siege perpetrated by the United States government."

Twitter reported that it has proactive systems that aim to detect large-scale platform manipulation.

Meanwhile, a severe gasoline shortage continues in the country with the largest oil reserves known to humankind. And Venezuelans are decidedly negative about the prospects of recovery, at least when it comes to the Bolivar/Dollar parity. “When the dollar goes down some, it is just crouching to take a giant leap”, an experienced Caraqueno wisely pointed out Tuesday night.




 

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