Venezuela’s Chavismo Blocks Dollarization Push as Power Cuts Bite
Venezuela · ECONOMY
Key Facts
- —Block assembly president Jorge Rodríguez removed Antonio Ecarri and ordered an investigation
- —Plan full dollarization drafted with Steve Hanke would scrap the bolívar and close the central bank
- —Legal claim chavismo cites Article 318 of the constitution, which names the bolívar as the currency
- —Power Caracas shopping malls ordered into two daily rationing blocks totalling eight hours
- —Inflation about 400 percent a year, Fortune reports; Hanke measures 354 percent
The assembly’s chavista leadership says the bolívar is untouchable, even as inflation runs near 400 percent a year and blackouts return to Caracas.
The chavista leadership of Venezuela’s National Assembly has blocked a push to dollarize the economy, stripping opposition deputy Antonio Ecarri of the presidency of the Venezuela-United States parliamentary friendship group on Saturday 22 August 2026 and opening an investigation that could bring sanctions, only days after he went public with a Venezuela dollarization plan drafted with the American economist Steve Hanke.
How chavismo stopped the dollarization initiative
Assembly president Jorge Rodríguez, the brother of acting president Delcy Rodríguez, announced the removal in an official statement, accusing Ecarri of irresponsible actions that violated the legal order. He cited Article 133 of the chamber’s internal rules, which binds deputies engaged in inter-parliamentary diplomacy to the constitution, and, more gravely, Article 318 of the constitution itself, which establishes the bolívar as the monetary unit and reserves monetary policy exclusively to the Central Bank of Venezuela. The board, he said, has opened proceedings to determine responsibilities and possible sanctions, and he will not allow a friendship group to be used to undermine the country’s constitutional foundations.
Rodríguez also denied that the National Assembly as an institution had hired Hanke, after Fortune reported on 20 August that the Johns Hopkins professor had been named special adviser on economic, monetary and energy matters to the office of a parliamentary leader. Ecarri’s press team said the contact was a personal initiative of the deputy, who leads the small Alianza Lápiz bench. Ecarri responded that he would press on with the Venezuela dollarization plan regardless, arguing that more than US$6 billion has been burned in exchange-rate operations without solving the underlying problem.
What the Venezuela dollarization plan proposed
According to Fortune, the Venezuela dollarization plan drafted by Hanke and Ecarri would abolish the bolívar as legal tender, make the US dollar the country’s only official currency and shut down the Central Bank of Venezuela, so that no government could again print money to finance itself. Hanke, who advised the late president Rafael Caldera in the 1990s, put the odds of approval at between 50 and 80 percent before the chavista reaction, calling it potentially the biggest switch from a domestic currency to an alternative since the introduction of the euro in 1999.
The case for the plan rests on an inflation that Fortune put at about 400 percent a year in bolívar terms; Hanke, who measures prices from purchasing-power parity and black-market exchange rates, calculated 354 percent annually this month. Ecarri’s argument is that Venezuela is already dollarized in practice for those with access to cash, while teachers, nurses, public workers and pensioners keep being paid in a currency that loses value every day. Dolarizar, he wrote, also means limiting the use of money to finance the excesses of power.
Electricity rationing tightens again
The monetary dispute unfolds as a new round of electricity rationing slows commerce and daily life. The executive director of the shopping-centre chamber Cavececo, Claudia Itriago, said on 19 August that malls, especially in Caracas, were told after meetings with the Electricity Ministry, state utility Corpoelec and the Commerce Ministry to observe two daily rationing blocks, from noon to 4 p.m. and from 6 p.m. to 10 p.m., eight hours that coincide with the sector’s most important trading window. She argued the sector represents only about 3 percent of consumption and reported malls suffering damage to their generators from the constant cuts.
Outages have intensified since late February, when blackouts went from weekly to almost daily, and May saw the heaviest rationing since 2012, with users in several states reporting five to ten hours without power each day. Records cited by the press attribute the shortfall mainly to the unavailability of about 80 percent of the thermoelectric park, hit by breakdowns, poor maintenance and fuel shortages. The government blames high temperatures and rising consumption fed by the economic opening; it replaced the electricity minister in March, naming Rolando Alcalá to end the blackouts, a promise yet to be met.
An economy courting foreign capital
Acting president Delcy Rodríguez has led Venezuela since the capture of Nicolás Maduro on 3 January in a United States-led operation, governing in permanent contact with Washington. Her administration is courting foreign capital to reactivate the oil industry.
The contrast with daily life remains stark. The basic food basket exceeded US$677 a month earlier this year while the minimum income covered barely 23 percent of it, according to the Cendas research centre of the teachers’ federation, and Corpoelec reconnection fees of up to US$48 are described by users as unpayable. The Rio Times reported on Tuesday on the widening gap between official and parallel exchange rates, the same differential the Venezuela dollarization plan was designed to eliminate.
What happens next
Ecarri has promised an intense national debate to take the proposal from discussion to law and announced a press conference to detail the draft, but with the chavista majority controlling the assembly’s agenda and an investigation open against him, the Venezuela dollarization plan faces long odds of even reaching a vote. Hanke’s role as adviser continues, according to both his office and the deputy’s team.
For the government, the episode is a test of how much economic heterodoxy it will tolerate while it negotiates with Washington and seeks oil investment. For households and businesses, the more immediate calendar is set not by the currency debate but by the rationing blocks that now structure the working day in Caracas and much of the interior.
Frequently Asked Questions
Who blocked dollarization in Venezuela and how?
National Assembly president Jorge Rodríguez, a leading figure of chavismo, removed deputy Antonio Ecarri from the presidency of the Venezuela-United States parliamentary friendship group on 22 August 2026 and opened an internal investigation, accusing him of violating the constitution by promoting the plan.
What would the Venezuela dollarization plan do?
The Venezuela dollarization plan drafted with economist Steve Hanke would abolish the bolívar as legal tender, adopt the US dollar as the sole official currency and close the Central Bank of Venezuela, ending the state’s ability to print money. Chavismo says it collides with Article 318 of the constitution.
How severe is Venezuela’s electricity rationing?
Caracas shopping malls were ordered in August to observe two daily cuts totalling eight hours, and users in several states report five to ten hours without power daily. May 2026 saw the heaviest rationing since 2012, with about 80 percent of thermoelectric capacity out of service.
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