Half of payments in Caracas performed in U.S. dollars

© Reuters. FILE PHOTO: A person counts Venezuelan bolivar notes in downtown Caracas, Venezuela January 9, 2018. REUTERS/Marco Bello

CARACAS (Reuters) – Half of funds for meals, drugs and companies in Venezuela’s capital Caracas are made utilizing {dollars}, in keeping with a report revealed on Tuesday by two native consulting companies.

The examine from Anova Coverage and the Venezuelan Finance Observatory, which gathered knowledge from 354 institutions in Caracas, discovered that 34.3% of foreign-currency money funds accounted for 34.3% of purchases made this month in supermarkets, pharmacies, {hardware} shops, and different companies, up from 27.5% in December.

Remaining funds in overseas forex have been made with playing cards or by way of financial institution transfers, the report stated.

The quantities of overseas forex in circulation have risen for the reason that authorities of President Nicolas Maduro relaxed financial controls in 2019 to assist companies struggling underneath U.S. sanctions and financial turmoil, with Maduro describing the greenback as an “escape valve.”

The examine stated transactions in Venezuela’s bolivar continued, at the same time as excessive inflation eroded its worth.

Venezuela’s authorities is hoping to strengthen the bolivar after inflation slowed late final 12 months and is contemplating taxing overseas forex transactions, although analysts and enterprise leaders say such tax wouldn’t assure bolivar’s restoration.

“Individuals will need bolivars once they see that inflation is steady,” stated Jose Guerra, an economist and a member of the Finance Observatory.

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