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Wed Mar 27, 2013, 04:47 PM

Venezuela conducts de facto devaluation

Venezuela’s Finance Ministry sold $200 million on a new secondary exchange system without disclosing the exchange rate for winning bids. The auction awarded dollars to 383 companies, the ministry said in a statement posted on its website. Only companies registered with the Cadivi currency board could participate in today’s auction.

Acting President Nicolas Maduro’s government introduced the new foreign exchange mechanism ahead of an April 14 presidential election in a bid to halt the bolivar’s decline on the black market and reduce shortages of goods in local stores. The bolivar has depreciated 19 percent to about 23 bolivars per dollar on the black market since Feb. 8, when the currency was devalued 32 percent on the Cadivi system.

“The only reason not to disclose the FX rate is because they don’t want to concede a de facto second devaluation in the middle of an election campaign,” Benjamin Ramsey, an analyst at JPMorgan Chase & Co. in New York, said in an e-mailed statement. “I think it’s safe to assume it was above the official 6.3, otherwise they would have disclosed.”

http://www.bloomberg.com/news/2013-03-27/venezuela-sells-200-mln-in-auction-without-revealing-fx-rate.html

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Reply Venezuela conducts de facto devaluation (Original post)
COLGATE4 Mar 2013 OP
Nuclear Unicorn Mar 2013 #1
COLGATE4 Mar 2013 #2
Nuclear Unicorn Mar 2013 #3

Response to COLGATE4 (Original post)

Wed Mar 27, 2013, 04:51 PM

1. Alternate Headline: Maduro endorses Capriles for president

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Response to Nuclear Unicorn (Reply #1)

Wed Mar 27, 2013, 05:17 PM

2. The ongoing decline of the Bolivar won't sway too

many votes away from Maduro - a large part of the populace isn't concerned with issues like devaluation which are poorly if at all understood. The decline in consumer goods and foodstuffs might but you can be sure that between now and election a whole bunch of petrodollars will be spent to make the shortages disappear, albeit for a short time.

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Response to COLGATE4 (Reply #2)

Wed Mar 27, 2013, 05:19 PM

3. And then a wave of inflation if not hyper-inflation. n/t

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