So, at the same time I was writing some silly post about telenovela actors, Omar was writing an incisive, accesible, brutal, and altogether awesome post about the chronology of when, exactly, the Central Bank lost its way.
The (inorganic) money quote (translated):
“Eight years on [after the approval of the reform of the law of the Central Bank, creating so-called “excess reserves”], the results are self-evident. As our colleague Ronald Balza points out in an interesting article on Fonden, up until the first semester of 2013, the government had extracted US$ 55 billion from the nation’s foreign reserves it had declared as “excessive” and transferred them to Fonden – including, amazingly enough, US$ 3 billion in the first semester of 2013(!) when it was patently clear that our economy’s access to currency was severely constrained. The bottom line could not be starker: contrary to what the law says, the methodology for how they come up with the “excess reserves” calculation is a mystery to everyone, and it has never been published or shared with the National Assembly. Contrary to what the law prescribes, Fonden’s investments have not been incurred in foreign currency alone, which has only made the reform’s harm all the more acute.”
Which begs the question: shouldn’t the BCV presidents, from Merentes on down, be held accountable for this once the dust settles? Just throwin’ that out there.
Do go and read the post.