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BBC: Venezuela devalues currency by 32% against the dollar

bolivarreducevalue

Venezuela has cut the value of its currency against the US dollar by 32%, in an effort to boost its economy.

The widely expected measure ramps up the official exchange rate of the bolivar from 4.3 to 6.3 per US dollar.

It was announced after Vice-President Nicolas Maduro’s return from Cuba, where he said President Hugo Chavez gave him instructions on the economy.

The leader has not been seen or heard in public since December, when he went to Havana for cancer treatment.

This is the fifth devaluation of the bolivar since Hugo Chavez’ administration started controlling the exchange rate, in 2003.

The previous devaluation was in 2010.

Experts have long considered the bolivar overvalued and the move came as no surprise in the oil-based economy.

As oil exports are calculated in US dollars, a weaker bolivar should mean more cash for the government.

Strict controls to prevent currency going out of the country mean that dollars are normally hard to get in Venezuela, but in recent times this situation had become acute, says the BBC’s Sarah Grainger, in Caracas.

Dollars have been trading at four times the official rate on the black market……..Read More

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Posted by on Feb 9 2013. Filed under Current News, Post To Slider. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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