After containing inflation, Nicolás Maduro is now betting on the strengthening of the bolivar

After containing inflation, Nicolás Maduro is now betting on the strengthening of the bolivar

The video on the Tik Tok account of Nicola Maduro has no waste. The revolutionary leader told his unconditional supporters that “these days he was in Maracay [a dos horas de Caracas]. The Casa Militar car broke down and I called a taxi. The taxi driver asked me what I was going to pay: dollars, rubles, yuan, rupees, petros, bitcoins. i went pim pum pam [sobre el celular] Yes I paid in petros [la criptomoneda bolivariana de escaso impacto en Venezuela]. And the [taxista] joyful”.

Despite the fact that the president forgot to include the bolivars in his fiction, to which almost no one gave the truth, it is precisely the national currency that is at the center of his latest financial operation. With this strategy, Maduro wants to take advantage of the new scenario traced by the de facto dollarization of its economy.

With the premise of spurring the anorexic Bolívar into the heat of the “new economic dawn”, the large financial transaction tax (LGTF). This 3% tax on foreign currency payments directly affects purchases in dollars in shops, stores, supermarkets and the famous bodegones, full of products imported from the United States and other countries. Precisely the sector where the US greenback has the most weight.

Such a controversial measure caused initial confusion in shops and streets. Early data, after five weeks, shows dollar payments have plummeted. According to the Superintendence of Banking Sector Institutions (Sudeban), electronic payment systems have exponentially increased their operations in bolivars.

Immediately, the government raised its chest thanks to the “strengthening of the national currency”.

A vendor counts Venezuelan bolivars and US dollar bills to give change to a customer at a public market in Caracas

Economic calculations show the decline in the circulation of the dollar to 2019 levels and the increase in the circulation of the bolivarin one dribble citizen to avoid tax. The LGTF, in addition to the 16% already charged for VAT, intends to keep some of the millions of dollars that the informal Venezuelan economy now moves.

Ecoanalítica has confirmed that currently 58.2% of payments are in international currenciesfor whom it would be the first time in these new times that this percentage would drop below 60%.

To a lesser extent, the Colombian peso (8.5%) and the euro (3.5%) circulated.

Ripe, who claimed the Nobel Prize in Economicsfeels strong and shows it in every measure, despite the crazy mistakes made in economic matters.

“The perception within the ruling faction of the Maduro government is that the current environment of rising oil prices and increasing demand for energy sources will last for a long time and allow it to generate an unprecedented level of revenue compared to for the past six years,” internationalist Mariano de Alba told LA NACION.

The immediate risk is great, as the demand for more bolivars is not guaranteed by the government. The first victim would be inflationwhich despite being the largest interannual on the planet no longer repeats the disproportionate figures of recent years in terms of hyperinflation.

Since coming to power in 2013, Maduro has accused the US greenback of being a “tool of empire”, the main “culprit” for the economic collapse that devoured 83% of its GDP. The bolivar has disappeared from the streets, depreciated against the dollar, consumed by rising prices and with almost zero purchasing power.

The situation seems to have changed with regard to the bolivar, but there are many doubts about the current situation, as if it were a mirage.

“Venezuelans don’t want bolivars, they’re useless, they’re not viable. No one trusts the bolivar. What to do after three mega-devaluations and the loss of 16 zeros? They are not good for transactions and do not store value. Venezuela suffers from a primitive monetary world, even resorting to barter“, told LA NACION the economist José Cordeiro, one of the fathers of the dollarization of Ecuador, which occurred between 1999 and 2000.

Exchange bolivars for dollars on the streets of Caracas
Exchange bolivars for dollars on the streets of CaracasFEDERICO PARRA – AFP

“Maduro’s tax makes the dollar more expensive, but nobody wants bolivars. Public employees are paid in bolivars and the first thing they do is spend them while cryptocurrencies are still widely used,” added Cordeiro, who also participated in the dollarization process in El Salvador.

“Maduro wants the bolivar to stay alive while hindering and discouraging the use of foreign currencies, basically the dollar. That is what they are after, but they are certainly unlikely to achieve that. trust, and the bolivar has zero confidenceit is only used for specific cases,” analyst Walter Molina Galdi told this outlet.

Cordeiro, for his part, does not believe that Venezuela, nor Cuba in his time or North Korea, bet on full dollarization to “not show their failures”. And it gives information: The base salary in Ecuador went from $40 before dollarization to $425 now.

Cordeiro resorts to another historic moment in Cuba, where the dollar went from being banned to the preferred currency of Cubans amid the special period. The tax that Castro imposed on the dollar, of 10%, caused people to avoid it by focusing on the euro.

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