Citibank 2015 Annual Report Download - page 320

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30. SUBSEQUENT EVENT
Citi uses the U.S. dollar as the functional currency for its operations in
Venezuela. On February 17, 2016, the Venezuelan government announced
changes to its foreign exchange controls. Based on this announcement,
Citi expects to begin using the SIMADI rate in the first quarter of 2016 to
remeasure its net bolivar-denominated monetary assets, despite the possibly
limited availability of U.S. dollars (notwithstanding the fact that it has been
described as a free floating rate) and although the new SIMADI rate may
not necessarily be reflective of economic reality. Re-measurement of Citi’s
bolivar-denominated assets and liabilities due to changes in the exchange
rate is recorded in earnings. At the expected minimum new SIMADI rate of
202 bolivars per U.S. dollar, Citi estimates that it will incur an approximate
$172 million foreign currency loss in the first quarter of 2016, which could
increase if the bolivar continues to devalue in the new SIMADI market.
Additionally, Citi expects its revenues and expenses will be translated at the
SIMADI rate beginning in the first quarter of 2016. Because the new foreign
exchange control rules have not yet been officially published and are thus
not yet effective, however, the impact to Citi’s results of operations as a result
of the February 17th announcement is not yet certain.