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Venezuela announces currency devaluation

Published: 
Saturday, February 9, 2013

CARACAS—Venezuela's government announced Friday that it is devaluing the country's currency, a long-anticipated change expected to push up prices in the heavily import-reliant economy. Officials said the fixed exchange rate is changing from 4.30 bolivars to the dollar to 6.30 bolivars to the dollar.

 

The devaluation had been widely expected by analysts in recent months, though experts had been unsure about whether the government would act while President Hugo Chavez remained out of sight in Cuba recovering from cancer surgery. 

 

 

It was the first devaluation to be announced by Chavez's government since 2010, and it brought down the official value of the bolivar by 46.5 per cent against the dollar. By boosting the bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help alleviate a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations.

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