Venezuela will switch to international payments in euros or yuan, while the US dollar will cease to be the base currency amid the financial blockade imposed on the country by the administration of US President Donald Trump.
The decision announced by Economy Vice President Tareck El Aissami, is aimed at speeding up the country’s economic growth.
Penaloza, who is a teacher and researcher at the Venezuelan Center for the Study of the Economic Situation (OVRE), welcomed the initiative which he said would stimulate businesses and individuals with foreign accounts that they can no longer use in transactions.
"A switch to an alternative European or Asian system will definitely simplify trade and give a positive result in the shortest possible time," the expert explained.
Raul Penaloza also believes that the decision will reduce Venezuela’s technological dependence on the United States.
“The Venezuelan market will be able to reorient itself to the European and Asian markets for technologies, spare parts and goods. As a result, the US influence on the region will weaken,” he noted.
This is going to be a bumpy road for Venezuela though the most obvious hurdle is the need to stop using bank accounts opened in the United States or managed with US mediation.
"A large number of Venezuelan importers and exporters have foreign accounts in the United States or in its satellites, such as Panama. This will cause small delays before enterprises and the entire system, both public and private, is reoriented to Europe or Asia," Penaloza continued.
To prevent possible speculation with new base currencies, the authorities have announced an increase in reserve requirements.
The minimum share of funds that commercial banks are required to keep in the Central Bank will increase from 31 to 40 percent. As a result, the amount of money in circulation will decrease along with the possibility of speculation.
Since winning another six-year term, Venezuelan President Nicolas Maduro has promised to bring about economic recovery. Still, the government has struggled to attract much needed investment amid a raft of sanctions on Venezuelan debt and its problem-ridden oil sector.