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Threatened state slump – Venezuela suffers massively under foreign exchange News

Friday, August 18th, 2017 | Economy

This could increase the food and drug dependency and lead to inflation in the three-digit percentage range, as evidenced by documents by experts, which the news agency Reuters could see. The crisis-shaken country thus has to make payments of 1.3 billion dollars this year. According to economics economist Tamara Herrera of Financial Synthesis, he says about two billion dollars will be available by the end of this year. "The weakness of the central bank in foreign exchange has strengthened the financial vulnerability of the country," says Mrera.
On Thursday Venezuela had over 9.9 billion dollars of foreign exchange, one of the lowest values ​​in 22 years. However, many of the country's reserves are in the form of gold and are therefore not available for the settlement of debts in the short term.
Blocked oil delivery
The financial situation is being reinforced by problems with the state oil company PDVSA. Oil sales account for more than 90 percent of the Opec member's exports. As Reuters told three insiders, for more than a month, the tanker "Karvounis", loaded with about one million barrels of oil, has been lying off the coast of the US state of Louisiana. According to information from the shipping sector, the designated buyer, PBF Energy, does not find a bank which wants to complete the necessary transactions for the deletion of the cargo. PDVSA rejected an opinion, a representative of PBF said the circumstances of the delivery were confidential.
Due to the political situation in the country international big banks are currently shy of Venezuela business. Credit Suisse has prohibited its employees from transactions with certain Venezuela bonds.
Bolivar on record
Venezuelan President Nicolas Maduro has had mass protests for months. More than 120 people were killed. The opposition accuses the left-wing president of using the controversial constitutional assembly to levy parliament and establish a dictatorship.
The value of Venezuela's national currency fell to a record low on Friday. For one dollar, investors had to leaf down 10.35 Bolivar on Friday, and so much as never since a currency reform in 2008, when three zeros were dropped on the bills. Within one week, the currency has recently lost a good 2 percent.
(Reuters / AWP)

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