Published On: Thu, Oct 18th, 2018

Venezuela abandons US dollar in favour of euro for international transactions

CARACAS - Venezuela is abandoning the US dollar and all future transactions on the Venezuelan exchange market will be made in euros, Tareck El Aissami, the country’s vice president for economy, has announced.

Financial sanctions imposed by Washington on Venezuela, “block the possibility of continuing to trade using the US dollar on the Venezuelan exchange market,” El Aissami said, adding that the American restrictions were “illegal and against international law.”

The American “financial blockade” of Venezuela affects both the country’s public and private sectors, including pharmacy and agriculture, and shows “just how far the imperialism can go in its madness,” the vice president said.

Venezuela’s floating exchange rate system, Dicom, “will be operating in euro, yuan or any other convertible currency and will allow the foreign exchange market to use any other convertible currency,” El Aissami said.

The vice president added that all private banks in Venezuela are obliged to participate in the Dicom bidding system.

The government is going to sell 2 billion euros between November and December to allow the public to purchase the European currency “at a real, non-speculative rate,” he said.

Last year, the US imposed sanctions prohibiting trading new debt and equity issued by the Venezuelan government and state oil company, Petróleos de Venezuela SA (PDVSA). The Department of Treasury also introduced several rounds of restrictions against Venezuelan top government officials.

President Nicolas Maduro was among those blacklisted and called it “an honour”.

Venezuela has suffered a severe social and economic crisis in recent years as it was hit by hyperinflation, the devaluation of the national currency and a shortage of basic necessities.

The situation has forced more than 2.3 million to people leave the country this summer in search of better life in Colombia, Ecuador, Peru and Brazil, according to the UN.

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