Oil-rich Venezuela is abandoning the US petrodollar, plans to introduce new international payment system

“I am announcing that Venezuela intends to introduce a new international payment system and to create a currency basket for the liberation from the dollar and, [we intend] to free ourselves from the clutches of the dollar, the currency that is strangling our country.”

“If they pursue us with the dollar, we’ll use the Russian rouble, the yuan, yen, the Indian rupee, the euro,” Maduro said.

Maduro plans to use the weakest of two official foreign exchange regimes and a basket of currencies. Currently in Venezuela, one dollar buys 3,345 bolivars, according to the central bank. At the strongest official rate, one dollar buys just 10 bolivars, but on the black market the dollar fetches 20,193 bolivars. A thousand dollars of local currency bought when Maduro came to power in 2013 would now only be worth $1.20.

On August 25, US President Donald Trump signed an executive order imposing financial sanctions on the Venezuelan government. The White House said the measures were “carefully calibrated” to put financial pressure on Maduro’s government.

Its important to note that Venezuela sits on the largest amount of oil reserves in the world:

Reserves amounts are listed in millions of barrels (MMbbl):

READ MORE: Trump isn’t going to Invade Venezuela, but what he’s planning might be just as bad

The United States previously threatened to sanction anyone involved with the Constituent Assembly, which was elected on July 30.

The Constituent Assembly is a legislative body, which has the power to amend Venezuela’s constitution. The election of the assembly took place amid mass, deadly protests across the country. Venezuelan opposition, as well as the European Union and the United States, have refused to recognize the body’s legitimacy.

Maduro says this is part of an “economic war” waged by the opposition and Washington, aimed at his ouster.

“This is the fight against the economic blockade of the imperial sanctions of (U.S. President Donald) Trump,” said Maduro.

Will Venezuela and Nicolas Maduro share the same fate as Iraq and Saddam Hussein?

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