Central Bank of Venezuela

The Central Bank of Venezuela (Spanish: Banco Central de Venezuela, BCV) is the central bank of Venezuela. It maintains a fixed exchange rate for the Venezuelan bolívar and since 1996 is the governing agent of the Venezuelan Clearing House System (including an automated clearing house).[4]

Central Bank of Venezuela
Banco Central de Venezuela
HeadquartersAvenida Urdaneta, Caracas 1010, Venezuela[1]
Established8 September 1939 (1939-09-08)[2]
Ownership100% state ownership[3]
PresidentCalixto Ortega Sánchez
Central bank ofVenezuela
CurrencyVenezuelan bolívar
VEF (ISO 4217)
Reserves5,080 million USD[3]
Websitewww.bcv.org.ve
Central Bank of Venezuela Building

History

Foundation and currency management

Since its inception in the late 1930s, the BCV was given a clear mandate to control the monetary policy of the nation, centralizing the operations of a handful of private banks that used to mint the Venezuelan currency, the bolívar. For almost 50 years the BCV managed to sustain a remarkable strong currency, with inflation rates hovering on the 2-3% mark during that period.

1980s oil glut
See also: United Kingdom–Venezuela relations § Control of gold in London

However, since the oil glut of the 1980s and the first serious devaluation of the currency in 1983 (known in Venezuela as Viernes Negro, or Black Friday) the bolívar has been plagued with chronic instability, mistrust and declining value that has been fed by the continued rise in inflation, topping an estimate for 2018 of one million per cent. Most of the foreign reserves are held as gold bars in Germany (almost 64%).[5]

Until 2015 the Supplementary System for the Administration of Foreign Currency (SICAD) operated as an alternative foreign exchange system for businesses and individuals. Given its ineffectiveness and the continued rise of the parallel (black market) exchange rate the system was discontinued in favor of the "Complementary Currency System", known for its Spanish acronym DICOM.[6]

2017 - Hyperinflation

Since December 2017 Venezuela the CPI has presented a behavior that fits most of the definitions for hyperinflation, the first in the country's history. The bank, subject to a strong control by the executive branch of the Venezuelan government, has ceased the publication of metrics such as the CPI and gross domestic product variation, creating a vacuum that has left investors and the public in a general state of disarray.

2019 - Sanctions

In April 2019, the U.S. Treasury Department sanctioned the Central Bank of Venezuela "to prevent it from being used as a tool of the illegitimate Maduro regime".[7]

Mandate

By law, the Central Bank of Venezuela is autonomous to formulate and exercise policies in its field of competence and it performs its duties and functions in coordination with the general economic policy.[8] The Constitution grants the central bank autonomy to outline and implement the policies. However, as of 2016, reforms deemed unconstitutional by some effectively nullified the BCV's independent status.[9]

The export, import or trade of Venezuelan or foreign currency are subject to the regulations established by the BCV, including the departure or arrival of coin and notes made by another countries by BCV's express order.[10]

System for Transactions with Foreign Currency Securities

The Central Bank is able to issue bonds through the System for Transactions with Foreign Currency Securities (SITME). In 2012, it was reported that $44 million worth of bonds were purchased through SITME in a single day for Petróleos de Venezuela, S.A.[11]

Presidents of the Central Bank of Venezuela
President Took office Left office Notes
Jesús Herrera Mendoza19401948[12]
Carlos Mendoza Goiticoa19481953[12]
Aurelio Arreaza Arreaza19531958[12]
Alfonso Espinosa19581960[12]
Alfredo Machado Gómez19611968[12]
Benito Raúl Losada19681971[12]
Alfredo Lafée19711976[12]
Benito Raúl Losada19761979[12]
Carlos Rafael Silva19791981[12]
Leopoldo Díaz Bruzual19811984[12]
Benito Raúl Losada19841986[12]
Hernán Anzola19861987[12]
Mauricio García Araujo19871989[12]
Pedro R. Tinoco19891992[12]
Miguel Rodríguez Fandeo1992[12]
Ruth de Krivoy19921994[12]
Antonio Casas González19941999[12]
Diego Luis Castellanos20002005[12]
Gastón Parra Luzardo20052009[12]
Nelson Merentes20092013[12]
Edmée Betancourt2013[12]
Eudomar Tovar20132014[12]
Nelson Merentes20142017[13][12]
Ricardo Sanguino2017[14][12]
Ramón Augusto Lobo Moreno20172018[15][12]
Calixto Ortega Sánchez2018present

See also

References
  1. "Google Maps". Google Maps. Retrieved 12 October 2017.
  2. "Company Overview of Banco Central de Venezuela BCV". Bloomberg News. 27 January 2018. Archived from the original on 27 January 2018. Retrieved 27 January 2018. Banco Central de Venezuela was formed in 1939 and is headquartered in Caracas, Venezuela.
  3. Weidner, Jan (2017). "The Organisation and Structure of Central Banks" (PDF). Katalog der Deutschen Nationalbibliothek.
  4. Reyes-Torres, Eddy (22 August 1996). "Automated Clearing House". Central Bank of Venezuela. Archived from the original on 15 June 2002. Retrieved 27 January 2018. Similarly, in those Clearing Houses in which automated mechanisms of clearing or exchange of checks cannot be established, the use of diskettes may be dispensed with or substituted by some other mean.
  5. Pons, Corina (5 February 2016). "Exclusive: Venezuela central bank in talks with Deutsche Bank on gold swap". Reuters. Archived from the original on 27 January 2018. Retrieved 27 January 2018. Around 64 percent of Venezuela's $15.4 billion in foreign reserves are held in gold bars, which limits President Nicolas Maduro's government's ability to quickly mobilize hard currency for imports or debt service.
  6. "UPDATE 1-Venezuelan central bank sells $215 mln at currency auction". Reuters. 17 July 2013.
  7. "Treasury Sanctions Central Bank of Venezuela and Director of the Central Bank of Venezuela". U.S. Department of the Treasury. 17 April 2019. Retrieved 2 December 2019.
  8. Maduro-Moros, Nicolas (30 December 2015). "DECREE WITH THE RANK, VALUE AND FORCE OF LAW OF THE CENTRAL BANK OF VENEZUELA" (PDF). Central Bank of Venezuela. Archived from the original (PDF) on 27 January 2018. Retrieved 27 January 2018.
  9. "Venezuela central bank curbs fuel fears over hyperinflation". Financial Times. 5 January 2016. Retrieved 4 January 2019.
  10. Serpa, Ana-Carolina (7 January 2016). "New Law of the Venezuelan Central Bank". Norton Rose Fulbright, Global law firm. Archived from the original on 19 September 2016. Retrieved 27 January 2018. The New BCV Law provides a series of reforms among which we would highlight the following: Authorization for the arrival and departure from the territory of monetary species representatives of the bolivar
  11. Cancel, Daniel (23 August 2012). "Venezuela Sells Record $44 Million PDVSA 2035 Bonds in Sitme". Bloomberg.
  12. "Galería de Expresidentes | Banco Central de Venezuela". bcv.org.ve.
  13. "Oficializan designación de Nelson Merentes como presidente del Banco Central de Venezuela". El Nacional (Caracas). 22 January 2014. Archived from the original on 12 February 2015. Retrieved 11 February 2015.
  14. "Venezuela President Maduro names new central bank chief". Deutsche Welle. 23 January 2017. Archived from the original on 21 April 2017. Retrieved 27 January 2018. Venezuelan President Nicolas Maduro announced during his weekly broadcast Sunday that economist Ricardo Sanguino was nominated to replace Nelson Merentes as the country's central bank chief.
  15. Laya, Patricia (26 October 2017). "Maduro Taps Finance Minister as Venezuela Central Bank Head". Bloomberg News. Archived from the original on 8 November 2017. Retrieved 27 January 2018. Venezuelan President Nicolas Maduro appointed Finance Minister Ramon Lobo as the country's new central bank president, replacing Ricardo Sanguino.

10.5100°N 66.9152°W / 10.5100; -66.9152

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