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LatinNews Daily - 05 January 2021

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In brief: Venezuela allows foreign currency bank accounts

* The de facto Venezuelan government led by Nicolás Maduro has authorised banks in the country to open foreign currency accounts, to help residents pay for goods and services in the context of high inflation and the devaluation of the national currency, the bolívar soberano. Many in Venezuela have highlighted the recent acceleration of ‘de facto dollarisation’, both as a result of government efforts to loosen currency regulations, and the population’s growing reliance on US dollars for completing even basic transactions. Maduro claimed that the move will support Venezuela’s transition to a “digital economy” in 2021, responding to “the war against our physical currency” (referring to international economic sanctions on Venezuela) by moving beyond the use of paper currency, instead tying transactions to foreign currency accounts. However, Maduro insisted that formal dollarisation remains out of the question, and that prices will continue to be set in bolívares – “Venezuela has its currency, and we are going to defend it”, he said.