TODAY VENEZUELA – The Central Bank of Venezuela (BCV) has placed on Friday new absorbing operations amounting to VEB 15 billion (USD 1.5 billion based on the foreign exchange rate of VEB 10 per USD), in accordance with its policies aimed at reducing excess liquidity, which pushes up demand of goods and services.
Both the private and public sectors take part in these operations, with a minimal amount of VEB 10,000, at terms of 56 days, due on April 22, and at an annual interest rate of 7%.
Absorption operations are a modality of open market operations, which are pivotal to control interest rates, manage liquidity, and set the course of monetary policy.
Liquidity has constantly soared over the last three years in the Venezuelan economy.
Government spokespersons have noted that excess liquidity drives up inflation by 40%.