Friday, January 29, 2010

Venezuela's Chavez Devalues the Bolivar

Hugo Chavez devalued the bolivar, Venezuela's currency, on January 8th. He has created two exchange rates: one will be for the public sector, at VEB 2.60 (previously at 2.15), while the other "oil dollar", associated more with industry, will be at VEB 4.30. Specifically, the first exchange rate will be applied to food, health, science and technology, retirees, pensioners, family remitences, and the general public sector, among other things. The "oil dollar" will be used for the many industries in Venezuela, as well as telecommunications, electronic services, computers, tobacco and alcohol, as well as many other similar areas.

Chavez says that this is an effort to reduce Venezuela's dependence on oil and to focus on exports instead.

However, the devaluation has been met with great hostility, and the US humanitarian aid has undermined Chavez's accusations of the US as an evil and greedy country.

Chavez has received much critism for his actions and his rule, which has only prompted more censorship -- he closed down several TV stations this past Sunday, with obvious lack of due process. Protests have turned violent, as students came to speak out in the streets.

Here is an article about Chavez devaluing the bolivar: Link.

And here is one discussing the public's recent reaction to Chavez: Link

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