CARACAS, Friday November 09, 2012 | Update

Oil price to define adjustment to the foreign exchange rate

Economists foresee imminent devaluation

If the foreign exchange rate is adjusted, inflation will amount to 26% in 2013 (File photo)
Friday November 09, 2012  12:53 PM

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
Venezuelan reservoirs in critical conditions

According to forecasts made in August by National Oceanic and Atmospheric Administration (NOAA), repercussions of El Niño Southern Oscillation (ENSO) phenomenon would be enhanced at least until March 2016.

  •  Read 
fotter Estampas
fotter Estampas