Venezuelan President Hugo Chavez and Foreign Minister Nicolas Maduro met on Monday with the Ecuadorian Foreign Minister, Ricardo Patiño, to evaluate the progress of their country’s bilateral agreements.
Inflation dropped in June, though the first half of the year experienced significantly higher inflation than last year. In the same period, government bodies approved substantially more dollar allocations. Also, two people were arrested for attempting to destabilise the banking system using Twitter.
Sudeban, Venezuela’s independent bank and financial institutions regulator passed a resolution last week to prohibit financial operations and transactions with off-shore banks in countries that apply little regulation.
In the midst of an overhaul of the bond trading regulations meant to stop inflation in the unofficial dollar market, the Venezuelan government stepped up its administrative oversight of brokerage firms.
At today’s meeting of the PSUV (United Socialist Party of Venezuela) President Chávez did not waste any time reminding the beleaguered Venezuelan stock brokers that he would have no problem closing them all if they did not step into line.
After president Hugo Chavez signed the reform to the law against illicit exchange on Sunday and it came into effect Tuesday, the government has now temporarily suspended foreign currency bond trading.
By Gregory Wilpert - Correo del Orinoco International, Jan 22nd 2010
If Venezuela wants to diversify its economy and export other products besides oil, an adjustment of the currency’s exchange rate was absolutely necessary. The understandable fear now is that this adjustment will mean more inflation and thus less purchasing power, which in theory would go against the socialist principle of improving the population’s standard of living.
Venezuelan President Hugo Chavez announced a devaluation of the official exchange rate of the bolivar currency and the creation of a second rate denominated the “oil bolivar” for non-essential imports, in a nationally televised address on Friday.
