Operations between foreign currency accounts in Venezuelan banks have been temporarily suspended, according to the Venezuelan banking system.
The suspension, which Sudeban (Superintendence of Banking Sector Institutions) has not yet been confirmed, is based on inconveniences due to the implementation of the reform of the Large Financial Transactions Tax Law.
Despite being unofficially, on Friday the 1st April, it became known through Sudeban that the government has instructed the national banking system to temporarily suspend transactions between accounts held in foreign currencies.
Financial entities in the country have notified customers about this suspension, which prevents transfers and payments between accounts in foreign currency, even if they belong to the same institution.
Foreign currency accounts
“Those of you who hold foreign currency accounts in Venezuela: transfers between such accounts in the same bank and payments in foreign currency to third parties are temporarily suspended. This will hopefully be for a short period of time. It would be a terrible decision to de-dollarize the economy in a hasty manner”, stated Luis Oliveros, an economist, on April 1st. He mentioned, however, that foreign currency withdrawals are allowed at the local bank teller windows.
As no announcement has been posted on its social medias, El Nacional (a Venezuelan newspaper and website) attempted to contact Sudeban to verify the information and no response has being released as yet.
Notwithstanding, banking sources said that the entity did indeed send a notice to banks about the suspension of operations between foreign currency accounts, derived from difficulties caused by the implementation of the reform of the Law of Tax on Large Financial Transactions (IGTF, for its initials in Spanish). IGTF includes a 3% tax on foreign currency settlements with merchants qualified as special taxpayers.
The length of time for which the restriction on transactions between accounts in foreign currency will be maintained is uncertain.
The withdrawal of foreign currencies at the ticket offices will not be subject to the IGTF, although it is subjected, as usual, to bank commissions.
Simultaneously, the Sudeban announced this Friday that they continue conducting inspections, along with the Seniat, to verify the enforcement of the IGTF and to encourage the use of the bolivar.
“As part of the implementation of the reform of the Large Financial Transactions Tax Law (IGTF), the Sudeban together with the Seniat, carry out campaigns in the capital city in order to encourage the use of the Bolivar as the official currency,” they informed through Twitter (@SudebanInforma).