Hugo Chavez's administration has instructed the Foreign Exchange Administration Commission (Cadivi) to restrict allocation of foreign currency for various purposes, as in the fourth quarter last year imports exceeded by USD 3.72 billion the inflow of foreign currency from oil sales, amidst declining oil prices.
The statistics, published by Cadivi -the agency responsible for distributing US dollars at the official exchange rate- showed that in the first two months this year, the amount allocated to importers, including the Latin American Integration Association (ALADI) agreement totalled USD 3.39 billion, a 32 percent fall compared to USD 5 billion in the same period of 2008.
This suggests that the government is set to further restrict authorizations of US dollars for purchases abroad.
Coping with a decline of petrodollars by curbing the supply of foreign currency may translate into shortage of products or increased imports of products with US dollars purchased in the parallel market (under the Venezuelan laws, it is prohibited to disclose the parallel exchange rate). Predictably, the inflation rate is to swell.
Cuban President Raul Castro met with President Hugo Chavez today, a day ahead of the start of the Fifth Summit of the Americas, where the abscence of Cuba will be one of thorniest issues for the United States.
Castro arrived in Cumana, Venezuela, as part of a meeting organized by Chavez for the ALBA trade bloc - which includes Honduras, Nicaragua, Bolivia, Cuba and Dominica, with Ecuador as an observer.
Chavez said in comments broadcast by state television that Cuba, despite its absence, will be at the center of the summit from the start.
Chavez also said that Venezuela "doesn't have big expectations" for the meeting, which will be attended by the leaders of 34 countries, including President Barack Obama.
The Summit will take place April 17-19 in Port of Spain, in Trinidad. Other Latin American leaders have pledged to bring to the forefront of their discussions with Obama the 47-year-old U.S. trade embargo on Cuba.
The Venezuelan leader said his government is opposed to the declaration being drafted for the summit.
"We, along other countries, say that we're opposed to that declaration," Chavez said without detailing which points he is against.
Russia's prime minister has approved a draft agreement with Venezuela to jointly establish a bank to finance bilateral energy and other projects.
The bank, to be founded by major Russian banks VTB and Gazprombank and Venezuela's treasury and state oil company, Petroleos de Venezuela S.A., is to be headquartered in Moscow and have a branch in the Latin American state.
There have as yet been no reports on its charter capital or the founders' stakes.
The bank is to provide services to corporate clients, mainly those engaged in oil and gas production in Russia and Venezuela, as well as in the petrochemical and power industries, metal production, machine-building, and infrastructure projects.
Prime Minster Vladimir Putin has ordered the Finance Ministry, Gazprombank, VTB and other involved agencies to finalize the agreement and sign it with Venezuela.
President Dmitry Medvedev and Venezuela's Hugo Chavez reached a tentative agreement on the bank during the Russian leader's first visit to the Latin American state last November. Media reports then said the leaders had also decided to use national currencies in mutual payments.
Venezuela's PDVSA and Russian oil and gas firms, including state-run oil giant Rosneft, Russian-British TNK-BP, Siberian producer Surgutneftegas and independent crude producer LUKoil, have furthermore been in talks to set up a consortium for joint production and refining.
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