(Bloomberg) -- Venezuelan President Nicolas Maduro appointed Finance Minister Ramon Lobo as the country’s new central bank president, replacing Ricardo Sanguino.
The decision to name Lobo to the central bank was announced by the all-powerful constituent assembly, which is run by government loyalists after the opposition boycotted the election of officials in late July. Lobo had only been in the role since January and didn’t oversee any meaningful changes of the crisis-stricken economy. No immediate replacement for Lobo was announced.
Since Maduro took over for the late Hugo Chavez in 2013, the Finance Ministry and central bank have seen their influence weakened in favor of close decision makers close to him like Simon Zerpa, who runs the finances at state oil firm Petroleos de Venezuela SA, and outside economic advisers. Sanguino, who for years was the head of the National Assembly’s Finance Committee, will leave behind a bank with reserves near a 15-year-low, inflation running at about 25 percent a month and no memorable policy decisions aside from overseeing the arrival of higher denomination bills to try to counteract shortages of cash.
“This designation will change absolutely nothing. Today the central bank is a null institution in Venezuela’s economy, that only answers to what the government tells it to do, violating its independence,” said Luis Oliveros, economist and professor at Venezuela’s central and metropolitan universities. “It’s a money printing and gold safeguarding office, which no longer even publishes macro economic data. It’s all more of the same.”
As Maduro hastens to fill government positions with loyalists, newly-elected Zulia state Governor Juan Pablo Guanipa, a member of the opposition, was dismissed from his post by the state legislature Thursday. Guanipa was only one of five opposition governors-elect to refuse being sworn in by the constituent assembly earlier this week.
The overwhelming defeat in this month’s gubernatorial elections has left the opposition disheartened and in disarray. The visible cracks are giving the government incentives to speed up the election cycle. Constitutional adviser to Maduro, Hermann Escarra, said new elections should be called in Zulia and that municipal elections could take place in December, while speaking to the constituent assembly earlier Thursday.
The changes come at a time when PDVSA, as the oil producer is known, has to pay more than $2 billion of debt in the coming week to avoid default. The nation’s bonds are tanking on doubts over the country’s solvency and the government hasn’t said whether those funds will be transferred before deadlines on Oct. 27 and Nov. 2.
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