Opposition leaders derided another currency devaluation by President Hugo Chavez’s Government as evidence of economic incompetence, while anxious Venezuelans hit shops yesterday in fear of price increases.
Though unseen in public since cancer surgery two months ago in Cuba, government ministers said Chavez personally ordered the fifth devaluation of the bolivar in a decade of socialist economics in the OPEC nation – this time by 32 per cent.
“The Maduro-Cabello duo are finishing off our Venezuela, we must not allow it!” said opposition leader Henrique Capriles, accusing Vice-President Nicolas Maduro and Congress head Diosdado Cabello of squandering revenue from high oil prices.
“They spent the money on (election) campaigning, corruption and gifts abroad. What a lying government!” Capriles said on Twitter.
The measure was announced before a four-day weekend for Venezuela’s Carnival holiday to minimise political or market repercussions.
It had been widely forecast as a way of redressing distortions including a black market rate for dollars at four times the old official level of 4.3 bolivars. Raising the rate to 6.3 bolivars will boost state finances by providing more local currency for each dollar of oil export revenue.
But it also hikes prices for imports crucial to the oil-dependent economy, potentially fueling inflation – though the state will seek to brake that using price controls.