The head of the Economic Sectoral Vice-Presidency, Tareck El Aissami, announced October 16th that the euro will become the new reference currency of the exchange market instead of the dollar, during a meeting with the Minister of Economy and Finance, Simón Zerpa, and the President of the Central Bank of Venezuela (BCV), Calixto Ortega. The measure responds to the economic sanctions imposed by Donald Trump’s administration on the Venezuelan government, which limit the amount of dollars available in the country. The Chinese yuan and the Indian rupee will work similarly as the euro. Although the public official did not specify when the measure comes into force, it is expected to happen in the coming days.

Another relevant announced measure is the increase of the legal reserve from 31% to 40%, in order to “prevent the sovereign bolivar from ending up in the speculative market,” said El Aissami. Hence, the government modifies the regulation issued by the BCV last Friday, October 16th, which determines that banking institutions have to maintain a minimum reserve of 31% of their funds deposited in the BCV. Also, the Executive branch will introduce a bill to the National Constituent Assembly (ANC) that penalizes individuals and organizations that use U.S. currency for smuggling goods into Colombia in the coming weeks.

Finally, participation in the Dicom currency auction system will no longer be exclusive to state banks and a group of private entities, as all banking institutions in the country will be incorporated into the activity. In addition, the Venezuelan government will offer more than 2 billion euros in the exchange market between November and December of this year.

The measures are part of the Recovery, Growth and Economic Prosperity Plan. The programme, promoted by Venezuelan President Nicolás Maduro, seeks to solve the serious economic crisis the country has been going through since last year. Other important measures of the last weeks are the modifications to the cryptocurrency Petro, the entry into force of the new currency, the Sovereign Bolivar, and the limitation of the banks’ credit capacity.