US Mulls Venezuela Central Bank Relief to Boost Economy

Article content(Bloomberg) — Lea en españolSign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe US is considering lifting sanctions on Venezuela’s central bank to facilitate the flow of billions of dollars into the country’s battered economy, according to people familiar with the matter.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentThe move would allow proceeds from oil sales to circulate more freely through Venezuela’s financial system, restoring a key channel for hard currency after years of restrictions cut the country off from global banking.Article contentIt comes as the Trump administration is trying to find ways to ease economic bottlenecks in Venezuela created by the US’s own sanctions framework. Payments to local companies working to jump start crude production are regularly being held up in US-based accounts as banks conduct compliance checks on transactions linked to the state oil firm Petróleos de Venezuela SA, according to the people who asked not to be identified because the matter isn’t public.Article contentArticle contentIn response to questions, the White House said it is prepared to take further steps to support Venezuela’s economic recovery.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“We will continue to take action, when necessary, to restore peace and prosperity in Venezuela,” said Taylor Rogers, a White House spokeswoman.Article contentVenezuela’s Information Ministry didn’t respond to requests for comment.Article contentThe US took control of Venezuela’s oil revenue after capturing former President Nicolás Maduro in January. Proceeds from crude sales were initially routed through an account in Qatar before being transferred to the US. About $1 billion has been sent to Venezuela’s central bank, but a large portion has yet to reach companies as banks process compliance reviews, the people said.Article contentFunds from oil sales have been piling up as contracts tied to PDVSA undergo additional scrutiny, delaying transfers and forcing some firms to halt operations, the people said. Article contentThe delayed payments threaten to undermine President Donald Trump’s plan to quickly boost Venezuela’s crude production and revive the economy. It comes as the Iran war is squeezing global crude supplies and pushing US gasoline prices to the highest in more than three years, putting political pressure on Trump. Article contentArticle contentVenezuela is expected to raise oil production by as much as 40% this year, an increase of roughly 300,000 to 400,000 barrels a day, according to US Energy Secretary Chris Wright.Article contentSanctions imposed by the US Treasury under Trump in 2019 cut Venezuela’s central bank off from the US financial system, effectively blocking most of its activities and deterring international banks from handling any related transactions.Article content“Eliminating these sanctions would allow the re-establishment of channels with international banks, reduce operational frictions, and expand the participation of more banks, giving real depth to the foreign exchange market,” said Alejandro Grisanti, director at the Caracas-based consulting firm Ecoanalítica.Article contentUS dollars are key to helping contain Venezuela’s depreciating bolivar and blunt growing inflation. After initial payments from oil sales were transferred into the country’s central bank, the government is ramping up dollar sales to the private sector as authorities try to contain a slide in the bolivar that risks reigniting hyperinflation. Article contentAlso read: Venezuela Boosts Dollar Sales to Stem Bolivar Slide Post-MaduroArticle content(Adds comment from White House spokeswoman starting in the fourth paragraph.)Article contentTrending Doritos at US$7 a bag ended up costing PepsiCo billions Retail & Marketing BYD to open 20 car dealerships in Canada this year Autos Canadian pension plans are so healthy that employers are taking a contribution 'holiday,' says Mercer Retirement Subscriber only. 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