Venezuela Announces Currency Devaluation

CARACAS, Venezuela (AP) -- Venezuela's government announced Friday that it 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.

Venezuela's government has had strict currency exchange controls since 2003 and maintains a fixed, government-set exchange rate.

Under the currency controls, people and businesses must apply to a government currency agency to receive dollars at the official rate to import goods, pay for travel or cover other obligations.

While those controls have restricted the amounts of dollars available at the official rate, an illegal black market has also flourished and the value of the bolivar has recently been eroding. In black market trading, dollars have recently been selling for more than four times the official exchange rate of 4.30 bolivars to the dollar.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2245789, ~/Articles/ArticleHandler.aspx, 8/28/2014 7:09:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement