Citibank, the world’s 9th largest bank with a US$127 billion market cap, is closing the government accounts of Venezuela.
On July 11, the country’s President Nicolas Maduro stated during a Council of Ministers meeting at Miraflores Palace in Caracas that Citibank NA is set to shut the Venezuelan government’s foreign currency accounts in less than a month.
“With no warning, Citibank says that in 30 days it will close the Central Bank and the Bank of Venezuela’s accounts,” Maduro said during his speech. He further emphasized the importance of the Citibank foreign accounts, which the government has been using to settle transactions in the United States and other countries.
In spite of Citibank’s actions as a part of a financial “blockade,” Maduro voiced his strong beliefs on the financial blockade by stating “Do you think they’re going to stop us with a financial blockade? No, gentlemen. No one stops Venezuela.”
The unexpected move from Citigroup will intensify the economic severity the Venezuelan government has been dealing with over the past few months. With Venezuelan oil output dropping by 10%, ports and other government buildings seized by the country’s military, and children dying in Venezuelan hospitals due to the lack of media resources, Venezuela is set to face a worsened economic crisis than predicted earlier this year.
“As the economy breaks down, life is telescoping to be just lines,” Datanalisis president Luis Vicente Leon told the Associated Press.. “You have masses of people in the streets competing for scarce goods. You’re inevitably going to get conflict, fights, tricks, you name it.”
The government of Venezuela is still yet to announce plans to deal with the financial cut from major international banks. The country’s citizens are also currently unable to leave the region because of the scarcity of foreign currencies and valuable assets.