Venezuelan banks will now be asked to deposit 100% of their legal reserve requirements to the Banco Central De Venezuela instead of 30%, as previously required, Bloomberg News reported, citing central bank president Calixto Ortega.
The initiative will apply to all deposits that enter after Sept. 1, and should be published in the official gazette in the coming days, according to the report.
Ortega said the move is aimed at fighting inflation and stabilizing prices. This effort follows the removal of five zeroes from the bolivar and legalizing money exchange operations at government-approved exchange platforms.
Legislator Angel Alvarado warned that the new requirement would weaken local banks' ability to lend. Cesar Aristimuno, a director at financial consultancy firm Aristimuño Herrera y Asociados, similarly warned the measure would cause the banking sector to stagnate, as "it won't receive money to cover its costs."