In recent weeks, the official exchange rate seems to have stagnated at around 24 bolivars per dollar, after the BCV intervened in the exchange market for around $180 million in a single day, on February 13. The stability of the dollar has reduced inflation, since the prices of goods and services anchored to currencies do not increase as frequently
Venezuelans could have a loophole from the incessant increase in prices that has plagued the economy in recent months, since in March there was a slowdown in the monthly variation of inflation, according to studies by the Venezuelan Finance Observatory (OVF).
Faced with a variation in inflation of only 4% for March, economist Luis Oliveros believes that Venezuela could expect a couple of months of low inflation, depending on the context and the incentives that the exchange market may have.
The key, for Oliveros, is that the Central bank of Venezuela (BCV) maintains its foreign exchange intervention policy to keep the foreign exchange market under control, although it warns that it will depend on the amount of money they can inject.
“Inflation in March, according to the Venezuelan Finance Observatory, was a little over 4%, something expected due to, among other things, the minimal variation in the exchange rate. It seems that a couple of months of low inflation are coming our way. The key will be whether the BCV has enough foreign currency to inject into the market,” he argued in his twitter account.
Inflation in March, according to the @observafinanzas it was a little more than 4%, something expected due to (among other things) the minimal variation of the TC. It seems that a couple of months of low inflation are coming our way. The key will be if there are enough currencies from the BCV to inject into the market.
— Luis Oliveros (@luisoliveros13) April 8, 2023
In recent weeks, the official exchange rate seems to have stagnated at around 24 bolivars per dollar, after months of spontaneous price increases that caused chaos in national trade and destroyed the already very poor minimum wages in force in the country since a year ago.
The stability of the exchange rate has caused the prices of goods and services anchored to the dollar to maintain a certain stability, although the national economy has experienced price increases, even in foreign currency.
* Also read: Now in Venezuela the offers of the shops are for payments with dollars
By the time the price of the dollar began to stagnate, in mid-February, it transpired that the BCV applied the largest sale of foreign currency in the exchange market that it has done so far, with an injection of $180 million on Monday, February 13.
However, with the scarce foreign currency to which the Government has access, it seems difficult for them to maintain the constant injection of dollars into the exchange market.
In addition, experts have warned that it is a superficial measure, because when the dollar tap ends, the demand for foreign currency in the market will be much higher than the supply, which will cause an abrupt increase in the price of the exchange rate.
*Also read: The exchange rate will stop “ignoring” inflation when the BCV cannot intervene
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