Discount of legal reserve | Pasqualina Curcio

A few days ago, the BCV, located in the Esquina de Carmelitas, announced that, within a year, banks will be able to discount and dispose of 30 billion bolivars weekly from the money that is saved for legal reserve, that is, 30 million million (BsS 30.000.000.000.000). The objective, according to the entity, is to reactivate the economy through bank credit, that is, they assume that banks are going to lend that money to their clients and they in turn are going to use it to produce. To give us an idea, 30 trillion bolivars is equivalent to 15% of all the money that currently circulates in the economy (cash and bank deposits).

At first glance, we could say that the BCV understood that this monetarist dogma of reducing the amount of money that it has been applying since August 2018 has not only not controlled hyperinflation, nor the depreciation of the bolivar, but, on the contrary, has contributed to a greater drop in national production.

Certainly, in the framework of hyperinflation induced by the attack on the bolivar, the amount of money must be increased to reactivate the economy, or at least to counteract its fall, also caused by the political manipulation of the exchange rate. We have been saying and writing this for a long time, since 2015. But it is the case that the recent decision of the BCV to increase the amount of money, in the way they are doing it, will not be able to reactivate the economy. Let's see why.

The first question we must ask ourselves is who will the credits be awarded to? One assumes that it is private companies to produce and reactivate the economy. Do you really believe that companies will increase their production in the current situation in which the purchasing power of Venezuelans has fallen 98% since August 2018? People have nothing to buy with. Whoever produces bananas or milk or tomatoes will not increase their production if no one will demand it. Even if they want to, they are not going to produce more than they already produce.

What will that businessman do? You will invest in a more profitable business. With these bolivars you will buy foreign currency, especially if you expect that, between now and December 6, the exchange rate will rise as a result of the imperial onslaught. Historical pattern of criminal dollar behavior.

Before continuing with the analysis, it is necessary to clarify that this increase in the demand for foreign currency due to the fact that financial and corporate capital may have 30 trillion / week will not be the cause of future depreciation of the bolivar between now and the elections, such as some monetarist economists have said. The exchange rate will continue to increase whether or not there are more bolivars circulating, whether or not the 30 billion weekly are available. Unless the enemy, for some magical and unknown reason, puts down his most powerful weapon in the middle of the electoral process.

The depreciation of the bolivar has been and will continue to be induced by imperial attacks as US spokesmen have already confessed, including Republican Senator Richard Black. So much so that from July 2018 to July 2020, according to the BCV, the real amount of money fell 77% as a result of the monetarist policy, and yet the criminal exchange rate did not stop, on the contrary, it increased 307.195% during the same period .

Continuing with the analysis, some will say that those 30 billion / week will serve to increase the limit of credit cards and with that it will increase the demand of the common people, stimulating production. And more or less with what are we going to pay the debt on the card if the salary is not enough?

The other question we must ask ourselves is who will the currency buy from with all those bolivars. Will it be a new auction by the BCV like the one held the week of August 20, 2020 so that “productive” companies have access to foreign currency? And another question arises, where did those currencies that they auctioned come from, because according to the BCV spokesmen they have only received 400 million dollars so far this year as a result of the economic blockade? How many were auctioned? If we have so little foreign currency as a result of the economic blockade, why are we giving it to the bourgeoisie?

The amount of money, undoubtedly, must be increased, but with the objective that it affects the recovery of the purchasing power of Venezuelans, so that in this way the demand for goods and services increases, and thus national production is stimulated. and consumption instead of being used by the financial and corporate bourgeoisie to acquire our few currencies and escape them ending up in tax havens.

It would be different, then, that those 30 billion / week reach the national economy through the strengthening of the public sector and are used to increase the nominal salary of workers in the public administration, pensions and retirements. In this way, national production would be stimulated because these workers could demand more bananas and milk and those who produce them would have someone to sell their merchandise to before it spoils.

It would be different if those 30 billion / week are used to finance the production of public goods and services. For the maintenance of hospitals or the acquisition of medicines, or the investment of the electrical or transport system, of education, or for investment in State companies, etc. To strengthen the public as it should be in socialism. Money that Venezuelans would see reflected in higher quality of services provided by the State. These 30 billion / week could also be allocated to support communal production or that which is in the hands of the workers.

Some say that there is no money to increase wages because imperialism has us blocked, and we ask ourselves, are there bolivars for the transnationalized bourgeoisie to access bank loans and buy the little foreign currency that is entering our country as a result of the economic blockade, But are there no bolivars to increase salaries in the public administration, dignify the working class, pensioners and retirees, contain the fall in demand and consumption and production generated by the imperial war?

We are aware that by allocating the 30 billion / week to salaries and the financing of the public administration, the attack on the bolivar will not stop, but at least, as long as said attack continues, the working class would not be the one that receives the greatest weight of the criminal onslaught.

The 30 billion / week is equivalent to at least 40 times the current minimum wage for the 3 million public workers plus the 4,5 million pensioners. There is a good part of the bolivars necessary to increase the salaries of the public administration and strengthen, above all, what is public.

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