Feb 8, 2013 / 7:00 pm
Venezuela's government announced Friday that it is devaluing the country's currency, a long-anticipated 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, though experts had been unsure about whether the government would act while President Hugo Chavez remained out of sight in Cuba recovering from cancer surgery.
It was the first devaluation to be announced by Chavez's government since 2010, and it pushed up the price of the dollar against the bolivar by 46.5 per cent.
By boosting the bolivar value of Venezuela's dollar-denominated oil sales, the change is expected to help ease a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations.
But analysts said the move would not be sufficient to end the government's budget woes or balance the exchange rate with an overvalued currency. Economists predicted higher inflation and a likely continuation of shortages of some staple foods, such as cornmeal, chicken and sugar.
Planning and Finance Minister Jorge Giordani said the new rate will take effect Wednesday, after the two-day holiday of Carnival. He said the old rate would still be allowed for some transactions that already were approved by the state currency agency.
Read more Business News
|QHR Technologies Inc||1.19||0.00|
|Anavex Life Sciences||0.315||-0.045|
|Copper Mountain Mining||1.58||0.00|
Big Picture Bank earnings and upbeat economic news highlight an active week In contrast with last week’s quieter, U.S. holiday-shortened week, the first week of December was a comparatively acti...
This column is the last of three, for how to prove your personal injury claim. It is the piece de resistance of the trilogy, the Chuck Norris piece – the final say! As mentioned in the first two...
Recently I recorded a video series for my keynote speaking business. It was called from Faith to Future. In one of the episodes, I talked about the concept of using hard work to get out of a difficul...
- Hudson's Bay reports larger Q3 loss, due to costs associated with Saks' purchase
- Sales of extra-large smartphones will take off in 2014: tech prediction
- Pilot's fears came true as plane crashed
- 'Sound of Music,' Panthers-Saints game draw viewers to NBC, giving it a strong ratings week
- Raitt defends Canada Post's decision to phase out urban mail delivery
- Extreme weather apparel maker Canada Goose sells majority stake to Bain Capital
- OPG fires 3 executives after auditor says generous salaries push up hydro rates
- Most actively traded companies on the TSX, TSX Venture Exchange markets
- Canada Post to phase out home delivery; eliminate thousands of postions
- Gas main leak that led to fire, evacuations in Oakland, California, is capped
- Reid says Senate will not extend farm law despite threat of milk prices rising
- Canadian Press NewsAlert:Canada Post to phase out home delivery in urban centres