Venezuela government and oil company decide to use RMB as the payment method

Venezuela government and oil company decide to use RMB as the payment method

According to Reuters, people familiar with the matter revealed that the Venezuelan government and the country’s National Petroleum Corporation (PDVSA) have agreed to use RMB to pay suppliers and contractors.

Since the U.S. sanctions on Venezuela have cut off President Maduro’s ties to the U.S. financial system, Venezuela has been seeking new means of international payment. This decision is a new initiative taken by the country in this regard in recent months.

According to sources, Venezuelan government officials verbally conveyed the news to at least four public service companies.

These companies will evaluate the government’s decision. It is unclear whether any company has started to implement this decision.

Reuters said that the People’s Bank of China and the Venezuelan Central Bank, the Venezuelan National Petroleum Corporation and the Venezuelan Ministry of Information did not respond to media queries.

The public sector in the commission states has always used private currencies to pay for private companies. However, the country’s hyperinflation and US sanctions have compounded the issue of means of payment. The Venezuelan government and oil companies have already started using euro cash to pay for oil and gold transactions.

Initial use of RMB will enable the country to use its funds in Chinese accounts, bypassing the US dollar payment system.

The Venezuelan National Petroleum Corporation and the Venezuelan Central Bank both have accounts in China. It is said that Venezuela’s central bank has at least 700 million RMB in the People’s Bank of China’s account.

U.S. economic sanctions on Venezuela also affect China’s imports from Venezuela. Petro China has stopped shipping oil from ports in Venezuela since August this year. Analysts estimate that China’s oil imports from Venezuela may fall to zero in November.

At the same time, China’s crude oil imports from Malaysia have grown significantly.

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