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Venezuela Devalues Bolivar 17% To 50%
Forbes ^ | 1/9/2010

Posted on 01/09/2010 9:32:33 PM PST by bruinbirdman

Two-tier exchange rate reintroduced to limit imports and help domestic businesses.

President Hugo Chavez has devalued Venezuela's currency by at least 17%.

The bolivar will now have two levels--a preferential rate of 2.6 bolivars per U.S. dollar for priority imports like food, health and machinery and a 4.3 "petrodollar" rate for other goods.

The currency had been fixed at 2.15 to the dollar since 2005, but ahead of Friday's announcement was trading at 6 bolivars to the U.S. dollar in parallel trade, a tolerated black market.

The petrodollar rate represents a 50% devaluation of the official rate.

The move will boost the state's bolivar revenues from oil and help local exporters, which have been calling for an adjustment of the overvalued exchange rate, but add pressure on domestic prices, which rose 25% in 2009, the highest inflation rate in the Americas and one of the highest in the world. Finance Minister Ali Rodriguez said devaluation may add 3% to 5% to the annual inflation rate in 2010.

The economy contracted by 2.9% in 2009 following five consecutive years of growth, with recession starting in the third quarter. Manufacturing and commerce are two sectors hardest hit, with contractions in output of 7.2% and 8.2% respectively, according to the Central Bank. The oil sector was down 6.1% by volume.

Non-oil exports fell to $3.3 billion from $6 billion in 2008. Oil exports, which account for the overwhelming majority of Venezuela's foreign trade, fell to $60.9 billion from $95.1 billion over the same period, the sharpest drop in commodity exports of any Latin American nation.

Chavez, in a live address on state TV, said that the two official rates would have the effect of "limiting imports that are not strictly necessary and stimulating export policy."

By reintroducing a dual exchange rate last seen

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events
KEYWORDS: bolivar; chavez; currency; venezuela

1 posted on 01/09/2010 9:32:34 PM PST by bruinbirdman
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To: bruinbirdman
So what's the evil little bastard up to now???

gitmos

2 posted on 01/09/2010 9:38:28 PM PST by SierraWasp (i 4 i, 2th 4 2th, L8 4 D8, tit 4 tat, GR8 B8!)
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To: bruinbirdman

Wow, he’s going down fast! at this rate, he’ll be gone in 2 years.


3 posted on 01/09/2010 9:40:37 PM PST by mamelukesabre (Veni, Vidi, Vicki: "I came, I saw, and I'm like, Omigod!")
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To: bruinbirdman
Perhaps our alleged president and congress will learn from Chavez' little experiments in statist control and management of a country's financial system.

Or not.

.

4 posted on 01/09/2010 9:48:34 PM PST by Seaplaner (Never give in. Never give in. Never...except to convictions of honour and good sense. W. Churchill)
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To: Seaplaner
"Perhaps our alleged president and congress will learn from Chavez' "

The Obammunist's socialism = "Those other guys didn't do it right."

yitbos

5 posted on 01/09/2010 9:52:46 PM PST by bruinbirdman ("Those who control language control minds.")
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To: mamelukesabre

I don’t think so, unless he is assassinated. He now has in place the kind of totalitarian grip on Venezuela that the Castros have on Cuba.


6 posted on 01/09/2010 9:57:18 PM PST by La Lydia
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To: SierraWasp
This is the same thing 0bama is doing in America.
The best way to steal people's wealth is to devalue their savings.

Suddenly, everyone's bank accounts are worth half of what they were before. Then Chavez/0bama can distribute "emergency funds" to the poor, and leave the 'rich' out to dry.


7 posted on 01/09/2010 10:00:12 PM PST by counterpunch (In this present crisis, government is not the solution to our problem. Government is the problem.)
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To: bruinbirdman

VeneZimbabwe.

The US does its dirty deeds more gradually.


8 posted on 01/09/2010 10:15:55 PM PST by GeronL (http://libertyfic.proboards,com)
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To: counterpunch

Is that what those hijacker/terrorists who hijacked that TWA flight back in the 80’s meant by having “EAT THE RICH” silk-screen on their t-shirts???


9 posted on 01/09/2010 10:40:31 PM PST by SierraWasp (i 4 i, 2th 4 2th, L8 4 D8, tit 4 tat, GR8 B8!)
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To: counterpunch

(squeal of horror at that graphic!!)


10 posted on 01/09/2010 10:50:58 PM PST by Mamzelle (Who is Kenneth Gladney? (Don't forget to bring your cameras))
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To: counterpunch

Is there a way to download this graphic?


11 posted on 01/09/2010 10:53:03 PM PST by Mamzelle (Who is Kenneth Gladney? (Don't forget to bring your cameras))
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To: bruinbirdman

anyone know whats the effect on their economy with a two tier system? Anyone know? Noone will be that dumb to accept trade in the lower tier. Ppl will try to figure out how to trade in the higher tier thru the blackmarket


12 posted on 01/09/2010 11:03:21 PM PST by 4rcane
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To: 4rcane

It is confusing to me, as well. How would they make that happen? I assume this would require price controls on those commodities, as well.


13 posted on 01/09/2010 11:18:57 PM PST by USNBandit (sarcasm engaged at all times)
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To: Mamzelle

Yes.


14 posted on 01/09/2010 11:22:35 PM PST by Westlander (Unleash the Neutron Bomb)
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To: counterpunch; Zeddicus
This is the same thing 0bama is doing in America.
The best way to steal people's wealth is to devalue their savings.

That's so true.

from http://www.freerepublic.com/focus/f-news/2424037/posts

& from http://www.freerepublic.com/%5Ehttp://market-ticker.org/archives/1830-401kIRA-Screw-Job-Coming.html

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

Let me tell you what this is - it is an attempt to prevent the collapse of the Treasury market!

Forcing people into Treasuries as an "annuity" is exactly what Social Security allegedly is. Except that Treasury stole the money that was collected in FICA taxes and spent it!

15 posted on 01/09/2010 11:31:36 PM PST by skinkinthegrass (Zer0 to the voter: "Welcome to 'MY' DeathCARE ® Plan"...Sucker! ...now just die. :^)
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To: Westlander

My Mac saves it... as 48 separate pictures.


16 posted on 01/10/2010 1:24:00 AM PST by deks
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To: bruinbirdman

well...going down to Altamira and finding a choice Castillian beauty to bring back home to mama just got cheaper.

Thanks Hugo..you prick.


17 posted on 01/10/2010 1:30:16 AM PST by wardaddy (Ole Miss beat Oklahoma State....and Bama is #1.....it's good to be from Dixie...cold though)
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To: bruinbirdman

bump for later!


18 posted on 01/10/2010 2:03:00 AM PST by momincombatboots (Ambition: climbing over others to make it; Passion: arriving while everyone enjoyed the climb)
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To: bruinbirdman; FerFAL308
The bolivar will now have two levels--a preferential rate of 2.6 bolivars per U.S. dollar for priority imports like food, health and machinery and a 4.3 "petrodollar" rate for other goods.

Oh yeah, that'll work for sure! LOL!

19 posted on 01/10/2010 9:52:26 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
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To: wardaddy

Whew....to be 25 and visiting Venezuela and Columbia today!


20 posted on 01/10/2010 9:54:02 AM PST by Travis McGee (---www.EnemiesForeignAndDomestic.com---)
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To: Travis McGee

yea baby...especially with the knowledge about such things maturity brings..lol


21 posted on 01/10/2010 10:29:59 AM PST by wardaddy (Ole Miss beat Oklahoma State....and Bama is #1.....it's good to be from Dixie...cold though)
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