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Cablegate: Cadivi Authorizations Sharply Down

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PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHMT
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DE RUEHCV #1758 3571837
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P 221837Z DEC 08
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TO RUEHC/SECSTATE WASHDC PRIORITY 2338
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
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UNCLAS CARACAS 001758

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HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR RJARPE
NSC FOR JSHRIER
COMMERCE FOR 4431/MAC/WH/JLAO

E.O. 12958: N/A
TAGS: ECON VE
SUBJECT: CADIVI AUTHORIZATIONS SHARPLY DOWN

1. According to statistics published December 22, the
Government of the Bolivarian Republic of Venezuela's (GBRV)
foreign exchange authority, known by its Spanish acronym
CADIVI, sharply reduced its foreign currency authorizations
over the first three weeks of December. While in past years
December authorizations spiked sharply, this year, through
December 18, CADIVI's average daily authorizations for
December were down almost 40 percent compared to the 2008
year-to-date average (USD 115 million vs. USD 187 million per
working day).

2. Comment: This sharp drop suggests the GBRV and the
Central Bank of Venezuela, which sets CADIVI's monthly
allocation, have comprehended the severity of the external
(foreign currency) shock hitting Venezuela as a result of
declining oil prices and are beginning to take action. It is
possible CADIVI authorizations will pick up in the second
half of December, thus bringing the monthly average in line
with the yearly average. We doubt this for two reasons,
however. First, daily authorizations for November dropped
somewhat at the end of November. Second, Minister of Finance
Ali Rodriguez indicated December 19 there would be cuts to
CADIVI's allotment of dollars to Venezuelans traveling
abroad, suggesting the GBRV is moving to contain CADIVI
authorizations across the board. We will discuss the
economic implications of this move septel. End comment.
CAULFIELD

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