Venezuela’s Bolivar is Devalued by 32%, Shortage of Dollars

In the fifth occurrence in nine years, the government of Venezuela has devalued their currency again. The Venezuelan government is attempting to mitigate the shortage of dollars in the economy. In addition, the devaluation of the bolivar can assist in narrowing the government’s fiscal budget.

Venezuelan Finance Minister Jorge Giordani said the government will weaken the exchange rate by 32% to 6.3 bolivars per dollar from 4.3 bolivars per dollar. The new exchange rate will start on February 13, 2013. The Sistema de Transacciones con Títulos en Moneda Extranjera (SITME), the central bank-administered currency market, will be eliminated following the change.

Venezuela is a member of Organization of the Petroleum Exporting Countries (OPEC) and is fourth biggest source of imported oil for the United States.

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