Latin American Economy & Business - February 2018 (ISSN 1741-7430)

After holding the official exchange rate known as ‘Dipro’ steady at BsF10:$ for nearly two years, President Nicolás Maduro announced the elimination of this official rate on 31 January. The rate had been essentially reserved for public-sector imports, but the government now plans to use a much weaker rate, the so-called ‘Dicom’, for all foreign-currency transactions. The move is likely to fan the flames of already-rampant inflation and, coupled with an ongoing slide in oil production, will do little to address the critical problems facing the economy this year.