Venezuelan Central Bank Working to Mitigate Covid-19 Economic Impacts (Legal Reserve)
The Central Bank of Venezuela (BCV) took new actions regarding monetary policy, in correspondence with the economic measures adopted by the national executive due to of the presence of Covid-19 in the national territory.
These monetary policy actions consist of determining a single reserve ratio of 93%, implying a simplification of the calculation for the reserve requirements that banking institutions must keep under Central Bank’s custody; as well as the elimination of the reserve deficit existing at the beginning of this new measure.
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Hence, the banking system will have, from May 1, 2020, 7% of new deposits entering the system, which will be available for the viability of maintaining the payment system, as well as, to attend to credit priorities in the framework of the current Coronavirus contingency.
These actions contribute to offset, in part, the new limitations on the performance of national economic activity, by providing a greater space for productive credit without significantly affecting the purpose of controlling inflation.
Translated by JRE/EF
