Venezuelan banks are not making letters of credit (L/Cs) available to importers according to local business leaders.

For their part, Venezuelan banks are blaming a lack of foreign exchange for the L/C shortage.

Industry reports

"For the last three months, domestic banks have not issued L/Cs for imports of raw materials and supplies to any companies in the packaging sector," according to chairman of the Venezuelan Chamber of Packaging, Mauricio Caycedo.

Executive director of the Venezuelan Chamber of Importers, Manufacturers and Distributors of Dairy Products, Teresa L, has gone on record to say that L/Cs for imports opened under the Latin American Integration Association agreement are subject to a three-month delay.

Dollar shortage

Some Venezuelan banks rely on foreign currency reimbursements by the Venezuelan Foreign Exchange Administration Board to support their L/C activities.

But according to bank sources, the board has not been making foreign exchange transfers on time, thus restricting the availability of US dollars.

Consequently, most financial institutions have decided to stop issuing L/Cs for the time being.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.