Venezuela’s Chavez announces currency devaluation, first since 2005
By APFriday, January 8, 2010
Venezuela’s Chavez announces currency devaluation
CARACAS, Venezuela — Venezuelan President Hugo Chavez on Friday announced a currency devaluation for the first time since 2005.
Chavez said Venezuela’s currency, the bolivar, will now have two government-set rates depending on the use, either 2.60 to the dollar for transactions deemed priorities by the government or 4.30 to the dollar for other transactions.
The devaluation dropped the currency’s value by 17 percent or 50 percent, depending on the tier.
The currency’s official exchange rate has been held steady by the government at 2.15 bolivars to the dollar since 2005.
Chavez also said the government will intervene in the lucrative parallel bond market, where the bolivar has recently been fetching about one-third of the official rate. He did not give details about what actions the government would take.
The devaluation comes as the oil-exporting country struggles with a recession and 25 percent inflation, the highest in Latin America.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
CARACAS, Venezuela (AP) — Venezuelan President Hugo Chavez has announced a currency devaluation for the first time since 2005.
Chavez says Venezuela’s currency, the bolivar, will now have two government-set rates depending on the use, either 2.60 to the dollar for transactions deemed priorities by the government or 4.30 to the dollar for other transactions.
The currency’s official exchange rate has been held steady by the government at 2.15 bolivars to the dollar since 2005.
Chavez also said Friday night that the government will intervene in the lucrative parallel bond market, where the bolivar has recently been fetching about one-third of the official rate. He did not give details about what actions the government would take.
