Saturday, January 28, 2023

Financing in Venezuela increases by 123% in one year

Financing in Venezuela increased by 123% in October compared to the same month of 2021, due to the easing of the credit restriction policy applied by the Executive to curb inflation, according to statistics published this Wednesday by the Superintendency of Institutions of the Banking Sector (Sudeban).

Last October, the loan portfolio reached, at the official exchange rate, US$677.03 million, when in the same month last year it was US$303.19 million.

The credit responded to a relaxation of the government policy to contain the exchange rate, which consisted of controlling the demand for dollars by reducing the issuance of bolivars -necessary to buy foreign currency- through the reduction of public spending and the restriction of financing .

In 2019, the Executive raised the legal reserve to 100% -a measure that obliges banks to maintain a percentage of their deposits in the Central Bank-, which reduced the loan portfolio by 68% in August of that year compared to the same month of 2018, by falling from US$684.3 million to US$212.57 million, according to data from Sudeban.

However, the current level of financing continues to be well below the requirement of the country’s economy, where industrialists reiterated this Wednesday that the lack of sufficient credit remains one of the main problems affecting manufacturing activity.

78% of businessmen reported a lack of financing during the third quarter of this year, according to a study presented today by the Confederation of Industrialists (Conindustria), which indicated that the financing needs for the industrial sector reach US$5,000 million.

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