Former central bank manager: there will be no devaluation in 2012

Ahead of a presidential vote "too close to call," economist José Guerra thinks that the government is unlikely to devalue the Venezuelan bolivar, as such a move may have negative consequences for Hugo Chávez's administration.

During the Economic Outlook Forum 2012, organized by the Venezuelan-American Chamber of Commerce and Industry (VenAmCham), the economist said that devaluation is strongly associated with government's popularity, particularly in an election year.

He noted that the government can count on high oil prices, debt and funds from the National Development Fund (Fonden), the Venezuelan Bank for Economic and Social Development (Bandes) and the Treasury Bank. "The decision to devalue will be taken in 2013," Guerra added.

Meanwhile, "the government will continue borrowing money, as it has occurred in previous year. Hugo Chávez's administration has been authorized to borrow USD 15 billion. I think it will use that money, which will be also used to help (state-run oil giant) Pdvsa."