Luis Vicente León, president of the research firm Datanálisis, said that official dollarization in Venezuela remains a complex and risky step because of the lack of funds and international reserves. According to him, dollarization could strengthen fiscal discipline: the government would lose the ability to cover deficits by issuing money, which would help contain inflation. However, solid macroeconomic conditions are essential for its sustainable implementation, and the country has not yet achieved them.
León noted that the economy’s dependence on oil revenues makes it particularly vulnerable to sharp price fluctuations. In his assessment, the current increase in revenue is largely linked to external circumstances, including higher oil prices amid geopolitical conflicts in the Middle East, but the situation could change as the global market stabilizes. Without sufficient reserves and its own monetary policy, the government would find it difficult to respond to falling revenues. Therefore, full dollarization is acceptable only if the country has financial reserves and room for maneuver.
Full version: Luis Vicente León warns that Venezuela cannot formalize dollarization without sufficient international reserves