The economic change that Chavez proposed on Saturday, March 21 to the National Assembly (AN), as part of his anti-crisis measures, involves the possibility of increasing planned government financing from $5.69 billion to $15.81 billion this year, which means a 183% increase compared to the original umbrella law. But the year-to-year increase is considerably higher. In the 2008 Borrowing Law, the government had a maximum limit to borrow –in the domestic and foreign markets- of $4.64. Therefore, the upsurge between 2008 and 2009 will amount to 240%.

During Chavez' administration, the highest level of debt allowed was approved in 2004, one year after the crisis of revenues created by a national oil strike. At that time, the government authorized a maximum amount of $8.55 billion, which represents almost half the indebtedness requested by President Chavez to the National Assembly.

Chavez administration prepares exchange and monetary measures

Venezuelan Planning & Development Minister Jorge Giordani said that government officials are preparing new economic moves in the monetary and exchange areas.  Giordani said during a TV show named Dialogo, aired by private TV channel Televen, that the Executive Branch and the Central Bank of Venezuela must act "like a couple" through their monetary and fiscal policies.  When asked whether the intended moves will involve a change in the reserve requirements, Giordani said that "these are strictly monetary measures which have already been implemented in Venezuela. It is a combination of economic measures."

As far as the exchange measures are concerned, the Planning Minister said that Chavez' Economic Cabinet will present this week President Chavez a plan to restrict the authorization of foreign exchange in order to preserve the supply of dollars to priority sectors, such as food, capital goods and inputs.  "Foreign exchange is limited. Therefore, we have to set priorities," Giordani said.

Government's sights are set on $45.12 billion in Venezuelan banks

The funds that the Executive branch of government intends to take from the financial system amount to 44.1% of the deposits that the Venezuelan banks have received from their clients in the form of deposits.

The warning made to banks by President Hugo Chavez on Saturday, March 21 within the framework of his anti-crisis measures, when he asked financial institutions to hand over the funds of their reserve requirements and of the mandatory loan portfolios, will involve an unorthodox move that could affect financial accounts.

The Executive branch of government's sights are on $45.12 billion deposited in the financial system as reserve requirements and mandatory loan portfolios that banks must use to finance some strategic sectors.

Venezuelan Banking Ass