Venezuela’s economy is in such disarray that there is now a whopping 660 per cent difference between the official exchange rate and the black market one. As of Tuesday, greenbacks could be sold on the black market in some corners of Caracas for up to 48 bolívars per US dollar, compared with the official rate of 6.3.
To try and stop the bolívar’s plunge, Nelson Merentes, finance minister, said during a televised interview on Monday evening that the government would soon unveil yet another foreign-exchange system. Continue reading »
Some call it “the most complex exchange rate system in the world” – and with good reason.
In Venezuela, there is the official, fixed exchange rate, which for many Venezuelans is a mere fiction; there is the black market exchange rate, which is known as the “unmentionable” rate since it is a criminal offence to do so; and then there is the Sicad rate, a more recent invention that occupies a grey area somewhere in between. Continue reading »
Those unfamiliar with Venezuela normally do a double take when they learn about the country’s rather unusual multi-tiered exchange rate system.
But the growing mystery surrounding it is making everything even more confusing than usual. Continue reading »
Once again, the unusual economic management of Venezuela’s socialist government seems to end up benefiting the “evil capitalists” on Wall Street more than ordinary Venezuelans themselves.
Although the introduction of a new foreign exchange mechanism next week doesn’t look like its going to go very far in solving the various problems facing Venezuela’s economy – not least shortages of foreign currency, and therefore of imported goods – it is good news for bondholders. Continue reading »
Somewhat distracted lately with the death of Hugo Chávez, Venezuela’s government is finally getting around to replacing a system it scrapped well over a month ago that allowed importers to access foreign currency.
With shortages of basic goods worsening by the day as a result and fresh elections just around the corner on April 14, it was clearly prudent to devote some attention to the issue. Continue reading »
If you thought economic debates were dull, stolid affairs, then think again. Just take a look at the debate currently raging in Venezuela for a master class in how to jazz up your economic rhetoric, after the government announced a devaluation last Friday.
While on the one hand you have critics saying the move was a result of “ideological necrophilia”, on the other there are officials scolding Venezuelans for acting like “nymphomaniacs”. Continue reading »
At last it happened. With traffic jams piling up all across the country as most Venezuelans were taking off for the beach to celebrate carnival, the government quietly announced a devaluation of its currency.
It was something that economists had long been saying was essential, with the dollars selling on the black market for almost five times the value of the official exchange rate this week. Continue reading »
If Venezuela’s finance minister Jorge Giordani is to be taken at his word, the OPEC country has entered a “new phase” of “stable and sustainable” growth.
Certainly, the economy’s 5.2 per cent growth in the third quarter announced by the government on Tuesday is not to be sniffed at, but there is a growing chorus of voices that suggest that Giordani’s projection of 6 per cent GDP growth for 2013 is at the very least optimistic. Continue reading »
How do you toast the victory of Hugo Chávez, Venezuela’s socialist president, who last Sunday won another six-year term, reconfirming him as one of Latin America’s most commanding political figures?
Not, perhaps, with Scotch, beer, or coca-cola. Indeed, the manufacturers behind virtually every international drink are more likely to be in the doldrums over the news than in celebratory mood. Continue reading »
Call it what you like: “green lettuce”, “fresh avocado” or “your Benjamin”. Just don’t use the word “dollar” when talking about any value of Venezuela’s currency, the bolivar, other than the official one.
Although there are eccentrically-named Venezuelan websites that do dare to track the black market exchange rate, which fell to record lows this week, on the whole it’s best not to talk about it at all – the government is likely to take a dim view. Continue reading »