Jan 01 2008
Solving Inflation the Venezuelan Way
The government of Venezuela cut the official exchange rate of its currency, the bolivar, in order to stem inflation.
Rather than address the root causes of inflation, such as the printing of cash to fund arms deals, the government has just hacked three zeros off the currency exchange rate.
The bolivar’s official exchange rate is now 2.15 bolivars per dollar, compared with the previous official rate of 2,150 per dollar.
Prices are expected to adjust accordingly.
The bolivar inflated at more than 20% for the last twelve months ending in November. Inflation sat at 17% in 2006, according to Reuters.
Makes me wonder if they have any economists in Venezuela.
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