Well I’m not too familiar with what’s happening in Venezuela aside from them devaluing their currency TWICE in the past 12 months but apparently they are still having trouble stabilizing their currency as it continues to fall in value rapidly. They appear to be in such a bad position that they have resorted to suspending their bond-markets and “plans to seize control of brokerage firms suspected of conducting ‘speculative operations.’” It’s an absolute mess if you ask me… trying to duct tape a sinking ship full of debt and inflation by suspending or restricting investors and citizens alike from abandoning ship… not cool!
As I do a little quick search on what has been happening I see an article by Jason Simpkins of Sock Markets Review that states “the annual rate of inflation climbed to 26.2% in July, according to the Central Bank of Venezuela. Many foreign sources have it higher. President Chavez insists his country is not in the midst of a financial crisis, but analysts believe this is just the beginning of a bad-news saga that will trip up a country whose heavy-handed economic policies have made it few friends.” - Link to article
Take a look at the article posted on Yahoo News.
Authorities temporarily halted the trading of government bonds on Tuesday and said they would seek to control Venezuela’s currency exchange rates by setting a range of permitted prices in the bond market.
National Securities Commission President Tomas Sanchez said that bond trading is being suspended while new regulations are established following the approval last week of legislation increasing the Central Bank’s control over currency trading.
The government also plans to seize control of brokerage firms suspected of conducting “speculative operations,” Sanchez said.
Central Bank President Nelson Merentes, meanwhile, announced a plan to establish a band with maximum and minimum prices in bond trading, which until last week had been an important outlet for Venezuelans to obtain U.S. dollars.
President Hugo Chavez is seeking to crack down on currency speculation that he blames for soaring inflation and the decline of Venezuela’s bolivar currency on the unregulated market. The embattled bolivar reached 8.30 bolivars to the dollar on the so-called parallel market on Tuesday — almost twice the official exchange rate of 4.30 applied to nonessential goods.
– Fabiola Sanchez, Associated Press
Related posts:
