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Central Bank of Venezuela

Coordinates: 10°30′36″N 66°54′55″W / 10.5100°N 66.9152°W / 10.5100; -66.9152
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Central Bank of Venezuela
Banco Central de Venezuela
HeadquartersAvenida Urdaneta, Caracas 1010, Venezuela[1]
Established8 September 1939; 85 years ago (1939-09-08)[2]
Ownership100% state ownership[3]
PresidentCalixto Ortega Sánchez
Central bank ofVenezuela
CurrencyVenezuelan bolívar
VED (ISO 4217)
Reserves$9.8 billion
Websitewww.bcv.org.ve
Central Bank of Venezuela Building

The Central Bank of Venezuela (Spanish: Banco Central de Venezuela, BCV) is the central bank of Venezuela. It is responsible for issuing and maintaining the value of the Venezuelan bolívar and is the governing agent of the Venezuelan Clearing House System (including an automated clearing house).[4]

History

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Foundation and currency management

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Since its inception in the late 1930s, the BCV was given a clear mandate to control the monetary policy of the nation, centralizing the operations of a handful of private banks that used to mint the Venezuelan currency, the bolívar. For almost 50 years the BCV managed to sustain a remarkable strong currency, with inflation rates hovering on the 2-3% mark during that period.

1980s oil glut

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See also: United Kingdom–Venezuela relations § Control of gold in London

However, since the oil glut of the 1980s and the first serious devaluation of the currency in 1983 (known in Venezuela as Viernes Negro, or Black Friday) the bolívar has been plagued with chronic instability, mistrust and declining value that has been fed by the continued rise in inflation, topping an estimate for 2018 of one million per cent. Most of the foreign reserves are held as gold bars in Germany (almost 64%).[5]

Until 2015 the Supplementary System for the Administration of Foreign Currency (SICAD) operated as an alternative foreign exchange system for businesses and individuals. Given its ineffectiveness and the continued rise of the parallel (black market) exchange rate the system was discontinued in favor of the "Complementary Currency System", known for its Spanish acronym DICOM.[6]

2017: Hyperinflation

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Since December 2017 Venezuela the CPI has presented a behavior that fits most of the definitions for hyperinflation, the first in the country's history. The bank, subject to a strong control by the executive branch of the Venezuelan government, has ceased the publication of metrics such as the CPI and gross domestic product variation, creating a vacuum that has left investors and the public in a general state of disarray.

2019: Sanctions

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In April 2019, the U.S. Treasury Department sanctioned the Central Bank of Venezuela "to prevent it from being used as a tool of the illegitimate Maduro regime".[7]

Mandate

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By law, the Central Bank of Venezuela is autonomous to formulate and exercise policies in its field of competence and it performs its duties and functions in coordination with the general economic policy.[8] The Constitution grants the central bank autonomy to outline and implement the policies. However, as of 2016, reforms deemed unconstitutional by some effectively nullified the BCV's independent status.[9]

The export, import or trade of Venezuelan or foreign currency are subject to the regulations established by the BCV, including the departure or arrival of coin and notes made by another countries by BCV's express order.[10]

System for Transactions with Foreign Currency Securities

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The Central Bank is able to issue bonds through the System for Transactions with Foreign Currency Securities (SITME). In 2012, it was reported that $44 million worth of bonds were purchased through SITME in a single day for Petróleos de Venezuela, S.A.[11]

Presidents of the Central Bank of Venezuela

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President Took office Left office Notes
Jesús Herrera Mendoza 1940 1948 [12]
Carlos Mendoza Goiticoa 1948 1953 [12]
Aurelio Arreaza Arreaza 1953 1958 [12]
Alfonso Espinosa 1958 1960 [12]
Alfredo Machado Gómez 1961 1968 [12]
Benito Raúl Losada 1968 1971 [12]
Alfredo Lafée 1971 1976 [12]
Benito Raúl Losada 1976 1979 [12]
Carlos Rafael Silva 1979 1981 [12]
Leopoldo Díaz Bruzual 1981 1984 [12]
Benito Raúl Losada 1984 1986 [12]
Hernán Anzola 1986 1987 [12]
Mauricio García Araujo 1987 1989 [12]
Pedro R. Tinoco 1989 1992 [12]
Miguel Rodríguez Fandeo 1992 [12]
Ruth de Krivoy 1992 1994 [12]
Antonio Casas González 1994 1999 [12]
Diego Luis Castellanos 2000 2005 [12]
Gastón Parra Luzardo 2005 2009 [12]
Nelson Merentes 2009 2013 [12]
Edmée Betancourt 2013 [12]
Eudomar Tovar 2013 2014 [12]
Nelson Merentes 2014 2017 [13][12]
Ricardo Sanguino 2017 [14][12]
Ramón Augusto Lobo Moreno 2017 2018 [15][12]
Calixto Ortega Sánchez 2018 present

See also

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References

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  1. ^ "Google Maps". Google Maps. Retrieved 12 October 2017.
  2. ^ "Company Overview of Banco Central de Venezuela BCV". Bloomberg News. 27 January 2018. Archived from the original on 27 January 2018. Retrieved 27 January 2018. Banco Central de Venezuela was formed in 1939 and is headquartered in Caracas, Venezuela.
  3. ^ Weidner, Jan (2017). "The Organisation and Structure of Central Banks" (PDF). Katalog der Deutschen Nationalbibliothek.
  4. ^ Reyes-Torres, Eddy (22 August 1996). "Automated Clearing House". Central Bank of Venezuela. Archived from the original on 15 June 2002. Retrieved 27 January 2018. Similarly, in those Clearing Houses in which automated mechanisms of clearing or exchange of checks cannot be established, the use of diskettes may be dispensed with or substituted by some other mean.
  5. ^ Pons, Corina (5 February 2016). "Exclusive: Venezuela central bank in talks with Deutsche Bank on gold swap". Reuters. Archived from the original on 27 January 2018. Retrieved 27 January 2018. Around 64 percent of Venezuela's $15.4 billion in foreign reserves are held in gold bars, which limits President Nicolas Maduro's government's ability to quickly mobilize hard currency for imports or debt service.
  6. ^ "UPDATE 1-Venezuelan central bank sells $215 mln at currency auction". Reuters. 17 July 2013.
  7. ^ "Treasury Sanctions Central Bank of Venezuela and Director of the Central Bank of Venezuela". U.S. Department of the Treasury. 17 April 2019. Retrieved 2 December 2019.
  8. ^ Maduro-Moros, Nicolas (30 December 2015). "DECREE WITH THE RANK, VALUE AND FORCE OF LAW OF THE CENTRAL BANK OF VENEZUELA" (PDF). Central Bank of Venezuela. Archived from the original (PDF) on 27 January 2018. Retrieved 27 January 2018.
  9. ^ "Venezuela central bank curbs fuel fears over hyperinflation". Financial Times. 5 January 2016. Retrieved 4 January 2019.
  10. ^ Serpa, Ana-Carolina (7 January 2016). "New Law of the Venezuelan Central Bank". Norton Rose Fulbright, Global law firm. Archived from the original on 19 September 2016. Retrieved 27 January 2018. The New BCV Law provides a series of reforms among which we would highlight the following: Authorization for the arrival and departure from the territory of monetary species representatives of the bolivar
  11. ^ Cancel, Daniel (23 August 2012). "Venezuela Sells Record $44 Million PDVSA 2035 Bonds in Sitme". Bloomberg.
  12. ^ a b c d e f g h i j k l m n o p q r s t u v w x y "Galería de Expresidentes | Banco Central de Venezuela". bcv.org.ve.
  13. ^ "Oficializan designación de Nelson Merentes como presidente del Banco Central de Venezuela". El Nacional (Caracas). 22 January 2014. Archived from the original on 12 February 2015. Retrieved 11 February 2015.
  14. ^ "Venezuela President Maduro names new central bank chief". Deutsche Welle. 23 January 2017. Archived from the original on 21 April 2017. Retrieved 27 January 2018. Venezuelan President Nicolas Maduro announced during his weekly broadcast Sunday that economist Ricardo Sanguino was nominated to replace Nelson Merentes as the country's central bank chief.
  15. ^ Laya, Patricia (26 October 2017). "Maduro Taps Finance Minister as Venezuela Central Bank Head". Bloomberg News. Archived from the original on 8 November 2017. Retrieved 27 January 2018. Venezuelan President Nicolas Maduro appointed Finance Minister Ramon Lobo as the country's new central bank president, replacing Ricardo Sanguino.

10°30′36″N 66°54′55″W / 10.5100°N 66.9152°W / 10.5100; -66.9152

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