CARACAS, Oct 25 (Reuters) - Venezuela’s central bank said on Friday it was raising the reserve amount that banks must deposit with the institution as part of its efforts to combat high inflation and a rapid expansion in monetary liquidity.
Annual inflation in the OPEC nation hit almost 50 percent in September, while consumer prices rose 4.4 percent month-on-month. The government has set an inflation target for next year of between 26 percent and 28 percent.
The central bank said it was raising the reserve amount for other banks to 19 percent, from 17 percent previously, on funds registered before Oct. 18. Funds registered after that date will be subject to a higher reserve requirement, of 22 percent.
“With these reserve measures, the central bank will ensure a moderation in the pace of monetary expansion in both the short- and medium-term,” the bank said in a statement.
President Nicolas Maduro’s government faces economic challenges ranging from slowing growth to soaring prices and stubborn shortages of some consumer goods.
His administration blames inflation on unscrupulous merchants arbitrarily raising prices of goods and services.
The opposition says his socialist policies, inherited from his predecessor, the late Hugo Chavez, have scared away investors, while a decade of currency controls has led to a shortage of hard currency for businesses in the import-dependent country.