In a move that was widely anticipated by the markets, Venezuela officially devalued its currency on January 1 2011, unifying the ‘essential goods’ rate of VEF2.6000/US$ with the ‘non-essential’ VEF4.3000/US$ rate. While the increased supply of dollars in the economy will make it easier to maintain the fixed exchange rate system over the medium term,… [Read more]

Given that President Hugo Chávez’s Partido Socialista Unido de Venezuela (PSUV) lost its two-thirds majority in the September 26 legislative elections, it is pretty likely that the ruling party is going to face a tougher time in passing some of the more radical elements of its socialist reforms. In addition, the 2012 presidential vote is… [Read more]

Risk Watchdog’s long-held view that the bolivar would sooner or later have to be devalued has finally materialised, with President Hugo Chávez on January 8 announcing the introduction of a dual exchange rate system. Bolivars will now officially be exchanged for dollars at two rates, VEF2.6000/US$ and VEF4.3000/US$, as opposed to the VEF2.1500/US$ peg that… [Read more]

Venezuela’s headline consumer price inflation edged down for a fourth consecutive month in January, falling to 30.7% y-o-y from its peak of 36.0% y-o-y in September. Despite the decline, Venezuela’s inflation outlook remains grim. In fact, since the headline rate hit its peak, the month-on-month inflation figures have actually pushed higher. In short, don’t be… [Read more]

RiskWatchdog’s discovery that Caribbean tourism endured something of a slump in 2008 is hardly worthy of front page news. After all, with credit in thin supply, jobless numbers on the rise and confidence at record lows, the last thing on the minds of most consumers last year was the need to top up tans and… [Read more]