Chavez’ brilliant monetary policy combined with the global credit crunch shot Venezuela’s average overnight lending rate to 90% last night. Yeeha!
The central bank announced Wednesday that they would no longer accept government bonds from commercial banks in exchange for cash. Banks reacted by slamming their own doors shut. By suspending a key liquidity-raising function, Chavez pushed Venezuela’s already sky-high lending rate of 22% into the stratosphere. Some banks were charging 120%. Central Banks should be helping the poor "rather than aiding the capitalists and bourgeoisie," explained Hugo when asked for reasoning behind his decision. At this rate, everyone will be poor in Venezuela except Hugo… so his Central Bank should have an easier task.
The central bank announced Wednesday that they would no longer accept government bonds from commercial banks in exchange for cash. Banks reacted by slamming their own doors shut. By suspending a key liquidity-raising function, Chavez pushed Venezuela’s already sky-high lending rate of 22% into the stratosphere. Some banks were charging 120%. Central Banks should be helping the poor "rather than aiding the capitalists and bourgeoisie," explained Hugo when asked for reasoning behind his decision. At this rate, everyone will be poor in Venezuela except Hugo… so his Central Bank should have an easier task.
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