Facing US sanctions, Venezuela offers suppliers payment in Chinese yuan | The Daily Star
12:00 AM, November 29, 2019 / LAST MODIFIED: 12:00 AM, November 29, 2019

Facing US sanctions, Venezuela offers suppliers payment in Chinese yuan

Venezuela’s government and its oil company PDVSA have offered to pay suppliers and contractors into accounts in China using the yuan currency, five people familiar with the matter said.

The move made in recent months is the latest example of how Caracas has sought new ways of making international payments since sweeping sanctions by Washington, intended to force out socialist President Nicolas Maduro, cut off the country’s access to the US financial system.

Officials have made the proposal verbally to at least four companies that provide services to the public sector, said the people, including two government officials and three sources from private companies in the financial or oil sectors. The individuals declined to disclose which companies have been approached.

The companies are evaluating the proposal, the sources said. Reuters could not determine whether any such payments in yuan have been made.

China’s central bank, the Peoples’ Bank of China, did not respond to a faxed request for comment. PDVSA, Venezuela’s central bank, and Venezuela’s information ministry did not respond to requests for comment.

Venezuelan public entities have traditionally paid private sector partners in the local bolivar currency or US dollars. But hyperinflation and US sanctions, which prohibit American companies from doing business with Venezuela’s public sector, are complicating those methods.

The offer comes after Venezuela’s government and PDVSA have paid some suppliers and contractors with euros in cash, which they have received from some oil and gold sales, in response to the loss of access to the US financial system due to the sanctions.

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