Central Bank of Venezuela intervenes heavily to stabilize exchange rate

The Central Bank of Venezuela (BCV) is implementing significant interventions to reduce the exchange rate gap. Economist Tamara Herrera, director of Síntesis Financiera, estimates that the BCV may deploy approximately $1.8 billion monthly into the exchange system through the end of 2026 to stabilize the market.

This strategy involves high-cost interventions, with an estimated $2.2 billion per month spent so far this year, totaling $9.2 billion. While these efforts aim to reduce the gap that causes dollar-induced inflation, they have required an increase in the official exchange rate and a substantial increase in the supply of foreign currency. Herrera notes that while the gap has been reduced, the cost includes strong inflation, with estimates suggesting a price increase of between 18% and 20% for July.