Hanke is now inside Venezuela's Assembly, and his plan abolishes the central bank

Start with the two rates in Fortune's account, because they do not quite agree. The bolivar lost 78% against the dollar over the past year ^[7], which means the bolivar price of a dollar rose about 4.5 times, roughly 355% ^[1]. Inflation is running at 400% ^[4]. Taking that as an annual figure, dollar-denominated prices inside Venezuela rose something like 10% over the same period ^[2]. The dollar has been the harder unit without being a still one, which is why the case Hanke makes rests on removing the note issuer from the government's financing options rather than on any property of the greenback itself ^[3].

Closing the central bank retires more than the printing press. It removes the lender of last resort, which the Fortune piece names as one of the daunting obstacles alongside handing monetary policy to the Federal Reserve ^[9]. Argentina is the nearby illustration. Javier Milei campaigned on dollarization and dropped it in office ^[11], still defends a peso pegged to the dollar, and when last year's regional election losses sent the peso into a tailspin ^[12], the rescue was a currency swap line from Treasury Secretary Scott Bessent ^[13]. A country that has abolished its central bank has nothing to put on the other side of that arrangement ^[5]. Dollar liquidity for Venezuelan banks under stress would have to be pre-funded or requested.

The repayment story leans entirely on oil. The $250 billion debt stock at about 150% of GDP ^[14] implies an economy of roughly $167 billion ^[3], and Hanke's argument is that higher production supplies the dollars for principal and interest ^[14], with the switch pulling foreign investment into the oil sector while lower rates revive borrowing and housing ^[15]. He also forecasts a move from negative growth this year to positive growth next year ^[16]. Those are the projections of the adviser to the chamber that would vote on the measure, given to one publication.

Which leaves the 50% to 80% band he puts on approval ^[6]. A spread that wide, from the man closest to the file, says the binding constraint is the vote rather than the economics, and the same National Assembly declined to give his currency board a majority in the mid-1990s ^[10]. His record is real and mixed: Montenegro onto the Deutschemark in 1999, Ecuador onto the dollar in 2000, the first dollarization in Latin America since Panama a century earlier ^[17]; the Zimbabwe dollarization he advised from 2009 ran four years before a new government reversed it and hyperinflation returned ^[18][4]. The Assembly's arithmetic, not the inflation print, decides which of those Venezuela resembles.