The president of the Central Bank of Venezuela (BCV), Calixto Ortega Sanchez, announced September 3rd the establishment of a legal reserve to private banks’ deposits as of September 1st. Thus, banks will not be able to use their liquid assets registered after September 1st 2018, to invest or lend. Government seeks to maintain price stability and wage protection. The measure, which came into force on the same day, was published in the Official Gazette N° 41,472 September 5th. In addition, the BCV will hold meetings throughout the coming weeks with representatives of the banking sector to ensure the success of the initiative and the sustainability of financial intermediation.
The measure affects the banking sector’s assets available for credit. Ortega Sánchez stated that “the BCV will retain 100% of the surplus bank reserves – the banks’ resources available for loans and investments – as of September 1st”. Likewise, this monetary policy will foster the Economic Recovery Plan, which is promoted by the President of the Republic Nicolás Maduro.
The measures announced are part of the “Recovery, Growth and Economic Prosperity Plan”, promoted by the Venezuelan government to address the severe economic crisis that the country has been undergoing since last year. Among the most important initiatives of the last few days, the most relevant are the entry into force of the monetary reconversion, which consisted of the removal of five zeros from the previous currency, the Bolivar; the enactment of the Financial Transaction Tax reform, which establishes a range of between 0.5% and 2% for special taxpayers, and the repeal of the Illicit Exchanges Law, which exempts from sanctions the activities of negotiating and trading foreign currency in the country.