Sources told Reuters that Venezuelan companies that held U.S. dollars to prevent hyperinflation paid as much as 7% of the cost of transferring these funds overseas.

Six people familiar with the matter told Reuters that Venezuelan companies that hold U.S. dollar cash to protect themselves from hyperinflation have begun paying up to 7% to transfer these funds to overseas bank accounts.

Since 2020, the country’s banks have allowed companies to store U.S. dollars in vaults, providing a refuge for 3100% of inflation that destroyed the Bolivar currency. No interest is paid on the account.

Sources said that since this year, banks and financial intermediaries have begun to provide a service to convert cash into deposits in foreign bank accounts at a transaction fee of 4% to 7% of the transferred amount.

This is another sign of the continued development of impromptu dollarization after more than 15 years of socialist economic control. This is a change that has taken place under the impetus of US sanctions, which have largely separated Venezuela from global finance. system.

The sanctions bar does business with the government and state-owned companies, but does not prevent transactions with private Venezuelan companies.

One of the sources said: “When the dollarization of the banking system is not complete, you need to find a way to make the company run.”

The source said the service allows companies in the retail, technology and pharmaceutical sectors to make payments to creditors and providers abroad, who did not want to be named.

The source declined to disclose the banks and companies that conduct business or the foreign institutions where deposits are made, and pointed out that international banks have imposed strict restrictions on the flow of funds in Venezuela.

The Ministry of Information, the Central Bank and Bank Supervisor Sudban did not respond to requests for comment.

After the United States imposed sanctions on the Central Bank of Venezuela, this unusual service emerged. Many foreign banks have stopped “correspondent banking” services that usually require cross-border transfers of funds.

Venezuelans are also increasingly using U.S. dollars and Euro cash for daily transactions.

According to data from consulting firm Ecoanalitica, as of March, 56% of transactions were conducted using US dollar or Euro bills. The company estimates that the total cash circulating in the Venezuelan economy is US$2.3 billion.

As the United States imposed sanctions on the Venezuelan National Petroleum Corporation (PDVSA) in early 2019, cutting off cash flow to the government, President Nicolas Maduro lifted the restrictions in 2019. Washington labeled Maduro as a dictator, who manipulated his 2018 re-election.

Maduro, who accused the United States of trying to stage a coup, regarded dollarization as an “escape valve” for Venezuelans suffering from economic crisis. Although Venezuela’s economic recession had already begun before Washington approved PDVSA, he still blamed the sanctions. Yu sanctions.