With an estimated US$23 billion in annual unmet demand for dollars, multinationals report that currency repatriation is one of the greatest challenges they face in Venezuela. Foreign exchange controls are unlikely to improve in the short term, regardless of the outcome in upcoming elections. Political instability after the elections could lead to even further shortages of CADIVI and SITME dollars. Given the insufficient supply of US dollars, multinationals have had to find creative ways to source capital in order to keep their operations moving in Venezuela.
The following three strategies are typically followed:
- Trade-based repatriation
- Dollarization of physical assets
- Panama swap
The case study below outlines how Chemical Company Alpha was able to successfully repatriate funds from Venezuela: