Venezuela announces currency devaluation
Source: AP
CARACAS, Venezuela (AP) Venezuela's government announced Friday that is devaluing the country's currency, a change expected to push up prices in the heavily import-reliant economy.
Officials said the fixed exchange rate is changing from 4.30 bolivars to the dollar to 6.30 bolivars to the dollar.
The devaluation had been widely expected by analysts in recent months. It was the first devaluation to be announced by President Hugo Chavez's government since 2010.
Planning and Finance Minister Jorge Giordani said the new rate takes effect immediately, though the old rate would still be allowed for some transactions that already were approved by the state currency agency.
Read more: http://bigstory.ap.org/article/venezuela-announces-currency-devaluation
MADem
(135,425 posts)This will not be popular with the masses...as it is, it's next to impossible to find a chicken for your pot, now it will be more expensive, too.
quadrature
(2,049 posts)only 'friends of Hugo' get the official rate
the price of rice or milk
in the grocery stores, will not
change because of the
new exchange rate.
MADem
(135,425 posts)quadrature
(2,049 posts)1) visiting tourists
2) companies that are usually friendly to Hugo, they get Dollars/Euros for imports.
.........................
everybody else pays the black market rate.
...................
the prices in, subsidized state-run grocery stores, can be anything, as these
prices do not reflect world conditions
MADem
(135,425 posts)consequence of this action.
NYT is saying the same thing: http://www.nytimes.com/2013/02/09/world/americas/venezuela-devalues-currency-amid-shortages-and-inflation.html?_r=0
Venezuela Devalues Currency by a Third Amid Shortages and Inflation
Pressure to devalue had been building for months, as the black market exchange rate rose to more than four times the official rate. The imbalance was evident in the prices of many goods. A Big Mac at McDonalds costs 70 bolívars, or $16.27, at the official pre-devaluation rate.
But the devaluation will also make imported goods more expensive, which will probably make inflation worse. Inflation for the 12 months ended on Jan. 31 was 22.2 percent, one of the highest rates in Latin America.
Surging inflation could cause political problems for the government. But the exchange rate had reduced the dollars available to importers, leading to shortages of goods like sugar, chicken and toilet paper. Many analysts believe that voters blame the government more for shortages than for inflation.
AtheistCrusader
(33,982 posts)Tired of patching code.