Venezuela’s government has announced that is devaluing the country’s
currency, a change expected to push up prices in the heavily
import-reliant economy.
The fixed exchange rate is changing from 4.30 bolivars to the dollar to 6.30 bolivars to the dollar.
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.