Official exchange rate deemed overvalued at 100%
International reserves fell down again to USD 25.7 billion
Macroeconomic policies in the agenda of the Government of President Hugo Chávez exhibit foreign exchange adjustment, even devaluation. However, the new political scenery raises doubt about the prompt implementation of this kind of decision making.
"We can see a combination of components that point to the need to fix the official exchange rate and open a foreign currency flow in line with imports and other payments required by the economy," maintained think tank Síntesis Financiera.
In the opinion of this firm, the official exchange rate at VEB 4.30 per US dollar is overvalued at 100%. It is a level approaching the record of 115% of overvaluation smashed in December 2009, just one month before the devaluation where two tiers of official exchange rate were set in order to lessen the inflationary impact of correction.
Minister of Finance Jorge Giordani has hinted the possibility not to disrupt the official exchange rate and enhance rationing of foreign currency.
The report released by Síntesis Financiera highlighted the performance of international reserves, which fell down again to USD 25.7 billion. It noted as well that international reserves have shed USD 4.1 billion this year.
A simple reason: there is oil galore, would suffice to explain Guyana's actions. Another explanation lies in the little or none efforts made by the Venezuelan government to thwart the move by the Guyanese. This is certainly not a new problem, but a problem only recently highlighted because oil is involved. But what other resources does the disputed area hold? For most of us it is a section on the map with black and white stripes on it, a depiction of something distant, alien, a nothingness not worth paying much attention to in geography classes back in elementary school.