Venezuela’s government, which is facing a worsening liquidity crisis, is to release US$1 billion into the economy obtained through the sale of the petro, its new cryptocurrency, Venezuelan President Nicolas Maduro said.
The aim was to boost the country’s international reserves and its foreign currency reserves, and to halt the rise of the black market dollar, Maduro said late on Thursday.
Despite having the world’s largest proven crude oil deposits, Venezuela’s foreign reserves have dwindled to US$9.7 billion, while it must pay off about US$8 billion this year.
Sales of the petro — Venezuela’s new cybercurrency, which was launched in February — had injected US$3.3 billion into the state coffers, of which US$1.7 billion would be set aside for importing “food, medicine and industrial goods,” Maduro said.
Of the remaining US$1.6 billion, US$1 billion was on Friday to be transferred to the Venezuelan Central Bank “for currency auctions and to continue fighting the devil,” he said, referring to the so-called “black dollar.”
Venezuela, struggling to overcome chronic liquidity shortages and burdened by US sanctions, launched the first government-backed cryptocurrency in the hope that it would lead the crisis-torn nation out of the financial woods.
Venezuela’s economic woes have much to do with a slump over the past few years in the price of oil, which accounts for about 96 percent of the country’s revenue.
US economic sanctions have also taken a heavy toll.
Last week, the IMF said Venezuela’s economic collapse ranked as one of the worst in modern history, with massive hyperinflation likely to see prices soaring 13,000 percent this year.
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