CARACAS, Feb 8 (Reuters) – Venezuela devalued its bolivar currency on Friday by 32 percent in a widely expected move that will shore up government finances after ailing President Hugo Chavez’s blowout election-year spending in 2012 but will also spur galloping inflation.
The country’s fifth devaluation in a decade follows two months of silence from the famously chatty Chavez, who remains in Cuba after surgery for cancer that has threatened to end his 14-year leadership of a self-styled socialist revolution.
The move slashes the official bolivar exchange rate to 6.3 per dollar from 4.3 under currency controls Chavez created in 2003 that require importers and travelers to apply for hard currency through a state agency.
Officials said Chavez ordered the measure from Havana.
The 58-year-old president has not been seen or heard from in public since the Dec. 9 operation, but aides visit him often and say he is signing papers and imparting instructions.
It will ease a shortage of greenbacks that has crimped imports and left many supermarkets barren of staples such as flour. But its inflationary impact could dent the government’s popularity at a time of uncertainty over whether Chavez’s cancer will stop him completing a third term in office.
Recent Comments