Saturday, February 09, 2013

Devaluation of Venezuelan currency

The Venezuelan government devalued the currency by 32% to 6.3 Bolivars for a dollar from 13 February. This was not unexpected. It was predicted for some time because of the large fiscal deficit which reached 11% of GDP in 2012. 

This is the fifth devaluation in nine years.

The black market rate is 19.53 Bolivars for a dollar. 

Imports are constrained by the delays and restrictions in releasing foreign exchange by CADIVI, the control agency of the government.

Shortages of food items, empty super markets, chaotic distribution system and the nationalisation and mismanagement of many companies have made a Cuba out of Venezuela.

The economy and secuity situation of the country are as bad as the cancer of Chavez.

The Bolivarian Revolution and the 21st Century Socialism of Chavez which started with good intentions have become nightmares. While the condition of of poor people have become better under Chavez, the economy, the society and the country in general have suffered long term damages.

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