The weakening of the “strong bolívar”In a harsher world Venezuela faces a reckoning
AP Spend now while the money lasts
OFFICIALLY it is an “exchange-rate adjustment” to make the country more competitive. But Venezuelans have been here before, and they know what to do. Within hours of a presidential decree on January 8th devaluing the currency by up to 50%, long queues formed outside household-appliance shops in Caracas, the capital. The minority with a little spare cash wanted to swap it as fast as possible for something of more durable value.
Burned into Venezuelans’ collective memory is “Black Friday” in 1983, an earlier devaluation that marked the demise of what had been for decades one of the world’s most stable currencies. In a seeming attempt to hark back to that earlier era of prosperity, Hugo Chávez, Venezuela’s leftist president, first fixed the currency in 2005 and two years ago relaunched it with three fewer zeroes as the “strong bolívar”, at 2.15 to the dollar.
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