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Venezuela sharply devalues its currency

February 8, 2013 • Business


FILE – In this Oct. 24, 2007 file photo, a woman looks at oversized versions of the new Venezuelan currency, coined the ‘Strong Bolivar’ in Caracas, Venezuela. Venezuela’s government announced Friday, Feb. 8, 2013, 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. Venezuela’s government has had strict currency exchange controls since 2003 and maintains a fixed, government-set exchange rate. (AP Photo/Howard Yanes, File)

CARACAS, Venezuela (AP) — 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 pushed up the price of the dollar against the bolivar by 46.5 percent.

By boosting the bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help ease a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending Login to read more

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