Oil price to define adjustment to the foreign exchange rate
Economists foresee imminent devaluation
Despite the Government's rejection, economists are confident that an "imminent adjustment" to the foreign exchange rate will be made in 2013.
Director of think tank Ecoanalítica, Asdrubal Oliveros, indicated that the firm foresees an increase in the foreign exchange rate from VEB 4.30 to VEB 6.30 per dollar in the Foreign Exchange Administration Commission (Cadivi) and to VEB 7.50 per dollar through the Transaction System for Foreign Currency Denominated Securities (Sitme).
Nonetheless, Ecoanalítica reckons that the Government relies on other means to make the respective adjustment. For instance, it may keep the same rate for Cadivi (VEB 4.30 per dollar) and increase Sitme's rate from VEB 5.30 to VEB 9.00 per dollar.
In either case, this will lead to a weighted devaluation at 46% and a net effect at USD 19.6 billion, enabling the Executive Office to rely on further resources for public expenditure.
Oliveros said the adjustment to the foreign exchange rate to VEB 6.30-VEB 7.50 per US dollar will depend on oil price. If the oil price floor is above USD 100 per barrel, a slight adjustment will be made. However, if said floor is below USD 80, the adjustment may be to VEB 7.50 per USD dollar.
The firm added that if the adjustment is made, inflation in 2013 may account for 26%, being, therefore, above the Government's estimate (14-16%).
Translated by Jhean Cabrera
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