After Decades of Socialist Policies and Stagnant Oil Prices, Venezuela’s Foreign Reserves Fall to a 30-Year Low
Posted on 01/05/2020
As the Venezuelan government under Nicolas Maduro publicly pushes out its national petro cryptocurrency, the country’s foreign reserves fell US$ 832 million to US$ 6.63 billion on January 2, 2020. This is a 30-year-low (since July 1989) in foreign reserves for the Central Bank of Venezuela. According to currency evaluator XE, at January 5, 2020, 1 U.S. dollar = 48,587.67 bolivars.
The petro is being used as a counter for the massive devaluation of the domestic currency of the Bolivar. On January 3, 2020, Venezuelan opposition lawmaker Jose Guerra (@JoseAGuerra) commented on Twitter, “Alerta. Brutal la caída de las reservas internacionales del BCV. El 2 de enero cerraron en $ 6.630 millones de los cuales líquidos menos de $ 1.000 millones. Así las cosas no hay como defender al bolívar frente al $. Señores la devaluación apenas ha comenzado.”
Translated, Guerra says that “There is no way to defend the bolivar against the dollar. Gentlemen, the devaluation has just begun.”
The Venezuelan government plans to sell oil in exchange for petros. The government claims it sells iron ore and steel for petros.
In May 2019, Central Bank of Venezuela sold roughly US$ 570 million in monetary gold.