PETROANALYSIS || ARTICLE
Pdvsa’s health: Its links to inflation in Venezuela
According to the Law of the Central Bank of Venezuela, Article 37, it is prohibited for the Central Bank of Venezuela to:
• Agree on the validation or monetary financing of deficit fiscal policies.
• Grant direct credits to the National Government, states, municipalities, autonomous institutes, state companies or any other public or mixed entity.
1) PDVSA has experienced a deep deterioration in its finances…
The marked deterioration of PDVSA’s finances has led to growing monetary financing through the Central Bank of Venezuela (CBV). This phenomenon started from 2010.
2) The growth of monetary emission destined to finance PDVSA…
Until 2009, the monetary financing to PDVSA by the Central Bank of Venezuela was equal to zero.
3) Relationship between PDVSA’s debt and the monetary base…
PDVSA’s debt with the Central Bank of Venezuela has grown significantly.