Sunday, June 4, 2023

Export taxes boost Venezuela’s foreign exchange supply: sources

Some income from US oil company Chevron’s crude exports is now an additional source of hard currency in Venezuela’s foreign market, three sources familiar with the matter said.

Chevron began exporting to the United States this year after revising the company’s license to revive crude production. Its foreign sales in April were at 148,000 barrels per day.

Regarding the income from exports, the company sells a share of oil in the exchangeable market to obtain bolivars, the local currency, and thus complying with certain obligations in taxes, projects, among others, said two sources at the time of the Government. continues with the policy of keeping the exchange rate stable to contain inflation.

“Chevron has to meet its obligations in bolívars… it needs resources in Venezuela to increase production in the fields,” said Asdrúbal Oliveros, economist and director of the local firm Ecoanalíticos.

Since February, the oil company has offered between 20 million and 30 million dollars a week on exchange tables managed by local private banks, the sources added.

“We continue to conduct our business in compliance with all laws and regulations, as well as the sanctions framework, provided by the United States Office of Foreign Assets Control,” Chevron said in a response to a request for comment. “Our mission is to support safe and secure operations.”

Private banks run exchange tables where individuals and companies buy and sell dollars and whose amounts are not specified. Additionally, the Central Bank of Venezuela (BCV) invests dollars in cash in banks, which are largely of oil origin, and which are then offered to industries.

Weekly payments range between 40 million and 50 million Venezuelan dollars, according to an estimate from the local Synthesis Financial consultancy.

“Chevron will continue to be a stabilizing factor if it continues to meet 20% of the demand for foreign currency that is served in banks, and it will certainly relieve the burden of BCV intervention,” said the financial firm Síntesis in a report.

The central bank did not respond to a request for comment.

In an attempt to control inflation, in the midst of dollarization, the Government adopted a strategy that agreed to inject the dollar to stabilize trade, cut public spending and restrict credit.

The plan shows gaps between the end of 2022 and March of this year, because the currencies issued by Venezuelans were insufficient to meet the demand. But the authorities are not considering changing the anchor exchange rate, sources said.

Annual inflation in Venezuela was 500% as of March, according to the Venezuelan Economy Observatory.

The need for more foreign currency to maintain the exchange rate and security ahead of the 2024 elections are among the reasons for corruption in PDVSA, sources said in March.

The review of sanctions is the main chip of the United States in its effort to promote the government of Nicolas Maduro to return to talks with the opposition to hold free elections.

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World Nation News Desk
World Nation News Desk
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