According to surveys by private consultants, the BCV placed maximum amounts of between $170 million and $200 million in a single auction. This is in stark contrast to the maximum bids of $80 million in one matchday in 2021.
The exchange strategy of the Central Bank of Venezuela (BCV) of injecting foreign currency into the banking system to contain the official exchange rate and the dollar in the parallel market continued to rise in 2022, but it did not achieve its objective when it became evident a constant devaluation of the bolivar after the increase of 281% and 286%, respectively of both currency prices.
This policy of BCV It was executed at the expense of its low international reserves and thanks to a timid increase in oil revenues and a significant variation in the price of a barrel of Venezuelan crude. According to official figures, the agency’s resources ended 2022 at 9,946 million dollars, that is, below the 10,937 million dollars at the beginning of the year.
Asdrúbal Oliveros, economist and partner-director of the Ecoanalítica consultancy, has pointed out -however- that a good part of the foreign currency resources that were offered in the official market came directly from the Petróleos de Venezuela (PDVSA) bank.
Between January and December 2022, the issuing entity carried out 81 foreign exchange interventions, which meant an increase of 21% compared to 2021 when 67 direct sales of foreign currency were made to bank exchange desks.
After a few first months in which he intervened between 3 and 6 times a month, the Central Bank raised the offers to between 8 and 14 per month in August, September, October, November and December 2022, this last month being when there was the greatest number of exchange operations.
Despite the intense intervention in the second half of 2022, this did not prevent the price of official dollar will close the year at 17.48 bolivars versus 4.58 bolivars beginning of the period, for an increase of 281%. While the parallel ended at Bs 18.55 for a variation of 286% compared to January when it started at Bs 4.81.
With these results, the bolivar depreciated 74% against the dollar during 2022, considered as one of the periods of greatest devaluation of the currency.
«The bolivar closes 2022 with a devaluation of 74%. Anywhere in the world it would be a tragedy, sadly something like this has become customary in Venezuela. Quite an obvious reason for people not to trust the national currency,” wrote the economist Luis Oliveros on his Twitter account.
The BCV foreign exchange interventions also had their differences with respect to 2020 and 2019 in terms of the amount offered.
Calculations by the consulting firm Síntesis Financiera indicate that the agency could have sold $3.6 billion in 2022. According to its polls, in the week of December 20 it placed $170 million in a single auction while on August 25 it sold $200 million. This is in stark contrast to 2021’s $80 million peak offers and even more so to 2020’s $35 million.
The Central Bank does not inform the public about the amount of the auctions, it only publishes the number of interventions each week.
«The strategy of defending the bolivar for a year and a half, rests on the intervention of the Central Bank in the exchange market and more and more resources are demanded. The BCV needs to moderate this because there is still a year and a bit left for the electoral moment that it will demand more foreign currency to counteract the strength of public spending,” Tamara Herrera, director of Síntesis Financiera, recently said.
On December 10, the administration of Nicolás Maduro announced that it would carry out “a series of drastic actions in defense of the exchange market and the official rate, disturbed by the speculative criminal dollar.” However, to date the new measures have not been reported and everything seems to indicate that in 2023 the BCV will continue with its exchange and monetary policy (high legal reserve and credit restriction) implemented since 2019.
*Read also: BCV affirms that Venezuela grew 17.73% between January and September 2022
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