Andean Group - September 2007 (ISSN 1741 4466)

The right wing opposition to President Hugo Chávez claims that the government will have to devalue very soon. Ordinary Venezuelans have started to borrow heavily in Bolivares and are using the money to buy dollar assets, the traditional hedge against a devaluation. The blackmarket rate for the dollar is B$4,800 while the official rate is B$2,150. The government is currently authorising transactions of around US$170m a day at the official exchange rate.

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