Venezuela on Friday began listing the price of its oil in the Chinese yuan, following President Nicolas Maduro's announcement last week that he would rid the economy of the "US imperialist system." The move was seen as a bid to weather US-imposed sanctions on the embattled country. The country's petroleum ministry listed the week's closing price per barrel at 306.26 yuan on its website, equivalent to $46.7, up from 300.91 yuan the week before.
But economist Cesar Aristimuno said the yuan figure had little meaning beyond reference value, "because at the end of the day, the market continues to be quoted in dollars." Washington's tough new sanctions on Caracas bar US banks from trading in new bonds issued by the government or the state run oil company PDVSA. The goal is to restrict Venezuela's access to vital bond and equity markets.
The aim is to "deny the Maduro dictatorship a critical source of financing to maintain its illegitimate rule," the White House said. Maduro railed that they amounted to a financial and economic blockade, as ratings agency Fitch downgraded Venezuela and warned default was now likelier. The country has to make $3.8 billion in debt payments in October and November, while its foreign currency reserves have sunk under $10 billion.