54279
Inflation in the country will likely rise to 400% in 2016.
Inflation in the country will likely rise to 400% in 2016.

Bolivar Loses 45% of Its Value

Bolivar Loses 45% of Its Value

Venezuela’s currency—the so-called “strong bolivar”—is weakening beyond levels that analysts had forecast just a few weeks ago as an expanding money supply chases a limited amount of US dollars.
The currency has lost 45% of its value so far this month to trade at 2,753 bolivars per US dollar on Thursday, according to dolartoday.com, a widely-watched website that tracks the exchange rate in Caracas. That’s the biggest monthly decline ever, according to data compiled by Bloomberg.
“The government has started injecting bolivars into the financial system in an accelerated manner again, and it’s set off repressed demand,” Asdrubal Oliveros, director of Caracas-based economic consultancy Ecoanalitica, said in a telephone interview. “There are too many bolivars in the street. People have the option of either buying goods or dollars, and they’re buying dollars.”
Torino Capital chief economist Francisco Rodriguez said in a report on Nov. 7 that the bolivar could likely end the year around 1,990 per dollar on the black market after the currency started to weaken in October following six months of relative stability. He raised that estimate to 2,327 bolivars per dollar in a report sent on Nov. 14. Inflation will likely start to accelerate over the coming months in certain sectors that are sensitive to the black market rate including restaurants, electronics, and appliances, Oliveros said.
Inflation in the country will likely rise to 400% in 2016, according to the median estimate of 13 analysts who responded to a Bloomberg survey. Individual responses ranged from 257% to 1,500%.
Venezuela’s money supply has risen 127% over the past year, according to the latest data available from the Central Bank in Caracas and compiled by Bloomberg.
Venezuela has maintained strict currency controls since 2003 and currently has two legal exchange rates—known as the Dipro and Dicom rates—of 10 and 661 bolivars per dollar used for priority imports. On the black market, where people and businesses turn when they can’t obtain government approval to purchase dollars at the legal rates, the bolivar has weakened 69% over the past year.

 

Short URL : https://goo.gl/hgrrhV
  1. https://goo.gl/1S0wnV
  • https://goo.gl/G7T0rE
  • https://goo.gl/EabvXe
  • https://goo.gl/4fScO5
  • https://goo.gl/RqhBpZ

You can also read ...

Report says China’s economic development must rely on integration between innovation and industrial production,  and work must be done to ensure that innovation progress was passed on to production.
China's new economy will account for an estimated 12% of the...
The process of building a new government could take weeks, so markets may well move on from the result quickly.
Politics dominated trading on Monday, with the euro sliding as...
World countries are casting a shadow on the future of the global economic system.
Next month, when finance ministers and central bank governors...
The economy’s return to growth has eased pressure  on the authorities.
Now that Nigeria’s economy is recovering from its worst slump...
One mining services company said it laid off more than 50 employees.
New laws and a crackdown on mining firms in Tanzania has...
EU Seeks Protection for Uber-Style Jobs
The European Commission said on Monday it wants more social...
US to See Slower Growth
The pace of US economic growth will stay stuck in the low 2%...
The Housing Pulse rose again, as the shortage of supply and increasing demand for properties continues to bite.
Bank of Ireland’s monthly Economic Pulse report, which...

Add new comment

Read our comment policy before posting your viewpoints

Image CAPTCHA
Enter the characters shown in the image.

Trending

Googleplus