Friday, February 27, 2015

Down and down I go

That ol' magia negra of Venezuela isn't petroleum, but their monetary policy;
The bolívar has plummeted into a free fall in recent years, Ricardo Hausmann said on Wednesday, head of the Center for International Development at Harvard University.
“It took one year to fall from 50 to 100 [Bs. per dollar], and five months to go from 100 to 200,” he tweeted. Hausmann forecasts that if the current trend continues, by December the bolívar will be traded at 800 Bs. per dollar in the black market.
It now takes 214 bolivars to buy one dollar, making a one hundred bolivar note worth less than $ 0.50. That's the market's verdict on Maduro's latest monetary scheme;
This news comes after President Maduro announced on Tuesday, February 10, a new currency exchange system, named the Marginal System of Foreign Currency (Simadi) and effective since February 19.
“With the new system we are putting an end to the mafia of the black dollar,” Maduro said. “This is why I created the Simadi. This is why I created an exchange system to protect the people.”
At its initiation, the exchange rate was 172 bolivars for one US dollar. Since then it's dropped by about 19%. Stop the protection racket, Nick!

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