The US sanctions placed against Venezuelan bonds by the White House on August 25 appear to be taking effect, as the state-owned PDVSA oil company lost a client today: Braskem, a Brazilian petrochemical company. The news came via Reuters, which cited a Braskem source as saying that the company considered the sanctions a factor in its decision to cut off ties with PDVSA.
According to Reuters, Braskem cancelled a “long term supply agreement” of hydrocarbons from PDVSA because it “did not consider the contract meaningful in terms of its volume”, since less than 0.1 percent of its consumption of the particular hydrocarbon came from the contract.
Reuters situated the news within the context of global traders “trying to cut their credit exposure to Venezuela” given the company’s precarious financial condition, as well as the August sanctions from Washington.
News of cancelled contract came at the same time that United States ambassador to the United Nations told reporters in New York City that a US oil embargo on Venezuela “is not off the table” if the Maduro regime does not reverse course on its path to hard-line authoritarianism.
PSUV Gubernatorial Candidate Goes on Disjointed Rant
The PSUV candidate for the governorship of Carabobo state, Rafael Lacava, appeared in a bizarre interview today on Globovision’s Vladimir a la 1 show. Lacava appears to have been answering a question about what he would do for Carabobo state were he to be elected in next month’s gubernatorial elections.
Below, a video of Lacava’s answer along with my translation:
Lacava: … as I did for the people of Puerto Cabello, and now I have to do it for the people of Carabobo. If I don’t make things happen, I’ll leave through the back door. I like going out the front door, making a lot of noise, with drums and everything. I don’t want to go out the back door. That’s why I have to make things work and solve problems.
If I have to stand on my head, go to hell and talk to whoever, I will do. One thing, though: don’t make me talk to Mr. Donald Trump, because I don’t like you because you are a mother… mother of God!
Vladimir: What if you become president tomorrow, and you have to talk to him?
Lacava: When that day comes, fuck, I hope that guy’s not around anymore because I don’t want to talk to that man-child!
This is not the first time that Lacava has turned heads due to his behaviour. At a campaign rally early this month, Lacava threw himself on the floor and rolled around as adoring crowds chanting regime slogans. Below, video of that event:
At another event in August, Lacava took off the soccer shirt that he was wearing and threw it at the crowd:
Regime Relents, Admits Bs. 100 Bill Here to Stay
On December 12 of last year, Maduro made a shocking announcement during a televised address: the Bs. 100 note, the most common in the country, was going out of circulation in 72 hours. Calling the measure necessary in order to help bring about a “new economic model”, Maduro’s announcement resulted in a week of chaos, looting and violence as panicked Venezuelans flocked to banks to exchange their bills before they became worthless.
The bills did not go out of circulation on December 15 as Maduro first announced. The date for the death of the Bs. 100 note was announced eight times, and each time it was postponed to a later time.
Yesterday, regime officials finally admitted that the note would in fact continue to be in circulation until further notice, abandoning Maduro’s plan to remove the bill from the streets of the country.
According to the president of the Superintendency for Banking Sector Institutions (SUDEBAN), Antonio Morales, the decision to keep the Bs. 100 bill in circulation came from a realization that the note simply “needed” to remain active.
Morales also said that the Venezuelan Central Bank was working on creating a new bill which would enter into circulation next year, but provided no more details on the measure.
Deputy Guerra: Venezuela Needs Bs. 50,000, 100,000 Bills
National Assembly deputy Jose Guerra called on the Venezuelan Central Bank (BCV) to immediately introduce Bs. 50,000 and Bs. 100,000 bills in order to keep up with the country’s runaway inflation rate.
The highest bill currently in circulation is the Bs, 20,000 note. To put the figure in perspective, a 1 kg bag of corn flour–a Venezuelan staple–costs Bs. 28,000 on the streets of Caracas.
The low purchasing power of the Bs. 20,000 note means that Venezuelans are forced to carry around stacks of cash to make even the most modest purchases. This is an obvious problem for Guerra, who said:
In a country where the percentage of people who do not use banks is more than 30%, not having enough high-denomination bills creates a serious problem when it comes to the normal functioning of the economy.
Guerra explained that the value of Venezuelan currency has collapsed by more than 70% since the start of the year, meaning that people have to use more and more bills to make purchases each day.
The country’s inflation crisis is so severe, Guerra stressed, that even if the BCV were to immediately put Bs. 50,000 and Bs. 100,000 bills into circulation today, it would already need to start planning for introducing a Bs. 200,000 bill in the first half of next year.
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