NEWS FLASH

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Inflation nearing 30% in August
VENEZUELA · Report · 09 Aug 2017

Runaway monetary expansion and the steep increase of the price of the dollar in the parallel market continues driving prices upwards. Officially approved price increases in July contributed to inflation while also helping alleviate shortages of some goods. However, the black market for goods thri...

Maduro won’t back off on ANC
VENEZUELA · Report · 29 Jul 2017

The National Constituent Assembly (ANC) elections that Maduro convened illegally to govern without separation of powers or constitutional guarantees are scheduled for July 30. Despite intense pressure at home and abroad and frenzied mediation by José Luis Rodríguez Zapatero in Caracas, Maduro ...

Dicom auctions: A Band-aid
VENEZUELA · Report · 25 Jul 2017

After two months of auctions, the Dicom system proves to be not much more than a Band-aid to Venezuela’s foreign exchange system. Gains are modest: it opened up a more transparent channel to official forex, establishes a (tenuous) relationship between the exchange rate and market conditions, and ...

Tight cash flow in the months ahead
VENEZUELA · Report · 19 Jul 2017 · 1 response

The government is carefully managing the country's tight forex cash flow, with little options to raise funds in the international market. Cashed-in exports in the first half of 2017 added up to $14 billion, 22 percent higher than in the first half of 2016, but the government's room to maneuver sh...

The July 16 Popular Consultation
VENEZUELA · In Brief · 15 Jul 2017

The government confronts tomorrow’s popular consultation with aggressive rhetoric, iron fist censorship of the media, and a “rehearsal” of the July 30 National Constituent Assembly (ANC) elections in parallel to the opposition’s event. Uncertainties surrounding the July 16 consultation make it di...

What has changed?
VENEZUELA · Report · 10 Jul 2017 · 2 responses

Moving Leopoldo López from a military prison to house arrest was a unilateral move by Maduro’s government seeking to reinforce its National Constituent Assembly (ANC) initiative. The ANC hasn’t gained legitimacy and provides common ground to the opposition and “original” chavismo in opposing the ...

Monthly inflation exceeds 20 percent
VENEZUELA · Report · 07 Jul 2017

We revised down our June month-on-month inflation rate estimate to 23 percent (from 26 percent in our previous report) reflecting the decline in prices of a group of agricultural foods. We forecast a slight acceleration to 24 percent in July. Accumulated inflation for the first seven months of th...

A jump in BCV’s non-reserve assets
VENEZUELA · Report · 03 Jul 2017 · 1 response

BCV's balance sheet as of May 31, 2017, published on June 29, reports a month-on-month increase of Bs 25,091 billion (236 percent) in the non-reserve assets account called “Diverse Assets in Foreign Currency” (Activos Diversos en Divisas). This account is not part of BCV’s foreign reserves. We...

Inevitable constituent assembly won’t bring stability
VENEZUELA · Report · 03 Jul 2017 · 1 response

National Constituent Assembly (ANC) elections are scheduled for July 30. Maduro’s call to form this body is unconstitutional, but he has support from the high court (which is stacked with loyalists), the National Guard (which is violently repressing protests), and most of his government. The p...

Watch the Supreme Tribunal, not the helicopters
VENEZUELA · In Brief · 28 Jun 2017 · 1 response

Yesterday's events are part of the government's strong propaganda and terror offensives en route to the July 30 Constituent Assembly elections.The government's main fight is now against the "original" chavismo movement which erodes its political footing. Yesterday's noise distracted public opinio...

2017–2019 Forecast: Autocracy vs Reforms
VENEZUELA · Forecast · 14 Jun 2017

With a crashing economy and an unpopular regime trying to entrench its power, anything can happen in Venezuela over our 2017–2019 forecast horizon. We construct two scenarios that we consider equally likely, one in which Maduro’s government persists (“Autocracy”) and another in which it is replac...

“Original” chavismo: New actor on stage
VENEZUELA · Report · 13 Jun 2017

A new actor is on the Venezuelan stage: the "original" chavismo, grouped around Chief Prosecutor Luisa Ortega Díaz. Ortega is discharging her institutional duty by opposing Maduro’s National Constituent Assembly (ANC) initiative. She is linked to “original“ chavistas who criticize Maduro and stan...

Inflation shoots up
VENEZUELA · Report · 12 Jun 2017

We forecast month-on-month inflation shooting up to 26 percent in June, and revise upward our May estimate to 22 percent (from 18 percent in our previous report). The year-to-date inflation rate for the first half of 2017 rises to 184 percent and the year-on-year rate goes up to 627 percent.

Goldman Sachs’s controversial operation
VENEZUELA · Report · 02 Jun 2017 · 1 response

The history of the Pdvsa 2022(N) bond sold a few days ago by BCV to Goldman Sachs ($2.8 billion), Nomura Securities ($100 million) and a third yet unidentified institution ($100 million) began in October 2014.

Dicom: An underwhelming debut
VENEZUELA · Report · 02 Jun 2017

BCV published the results of the first auction of the new Dicom system on May 31, 24 hours later than promised. The list of beneficiaries has been published as we write. Experience to date tells us that BCV is afraid of letting the Dicom rate get close to parallel market level. The forex flow ...