Did Venezuela Really Really RV?

[shela1153]

I found this post on DD it is from J4dinar

VENEZUELA JUST RV’D !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!! Just updated on UN Operational Rates of Exchange Site, link provided. https://treasury.un….ionalRates.aspx CD Historic Rates VEF (Venezuela Bolivar Fuerte) Used in the following countries: Venezuela Export to: XML Excel Processing, please wait. Operational Rate Effective Date 4.29 21 Jan 2011 2.5935 15 Jun 2010 4.29 01 Mar 2010 2.5935 01 Feb 2010 2.6 25 Jan 2010 more O yeah baby…thats what Im talkin bout. The good part of the message is that this is the FIRST rate change of 2011 posted by the UN. We know they are at least working this year! First rate change since Dec. 31, 2010. Question: was Venezuela a part of the basket of currencies we are waiting on? If so, then what I’m seeing is in March 2010 it was $4 then it dv’d to $2. now it’s rv’ing up again. If it’s in the basket then that’s a plus if it’s not, then the venez govt is rogue It is great news my friend. This Currency Devaluation appears to have been decided 3 weeks ago………sound familiar??? The other interesting thing (perhaps) that I noticed was that the EFFECTIVE DATE is 1/21/2011 (TOMORROW). And yes, it is great to see them change on the 20th of the month, which gives no credence to the 1st and 15th garbage we heard from many FX “gurus” that shall remain nameless. Cheers my friend. What a ride……… Oops it did go down! No different than 1170-1 for IQD….we want that down to like >.26 would be $3.85rv As Eagle has stated, the best news is UN has RV’d a currenct for 2011! Come on…keep it coming until the RV is done in Iraq

This is not an RV, it is a devaluation! When you go from 2.6 VEB to the dollar to 4.3 that is a devaluation!

[shela1153]

Venezuela has implemented two rates of exchange:

Venezuela implements devaluation; creates two foreign exchange rates
The US dollar increases to VEB 2.60 and the so-called "oil" dollar is created at VEB 4.30

Chávez said that the new two foreign exchange rates will pave the way for a more efficient use of foreign exchange (Handout Photo: Miraflores Press Office)
Economy Venezuelan President Hugo Chávez announced late on January 8 the implementation of a new exchange rate that includes two official prices for the dollar. The first exchange rate will be VEB 2.60 per dollar (previously at VEB 2.15), and the so-called "oil dollar" at VEB 4.30.

The ruler also reported that the Central Bank of Venezuela (BCV), jointly with the Executive Office would step in the foreign exchange market to prevent speculative foreign exchange operations.

The two official rates will be in force for two different sectors of the economy. The VEB 2.60 per US dollar rate will be for food, health, imports of machinery and equipment, science and technology, as well as everything related to the public sector, family remittances, remittances of US dollars to Venezuelan students abroad, consulates and embassies in the country. It will include retirees, pensioners and special cases.

Meanwhile, the car industry, trade, telecommunications, chemicals, steel industries, computers, rubber and plastics, electrical appliances, textiles, electrical services, construction, electronics, graphics, tobacco and beverages, among others, will be covered by the "oil dollar" at VEB 4.30 per dollar..

"We want these measures to stimulate exports. We want Venezuela to become a country that exports and stop being dependent exclusively on oil," Chávez said in justifying the decision.

Dollars to Fonden
In order to "promote and encourage the development of national economy," USD 7 billion will be transferred from the BCV to the National Development Fund (Fonden).

"International reserves have exceeded the legal limit established and these extra resources will be transferred," to Fonden, he said.

Three special funds will be created in 2010 to manage Venezuelan resources in 2010.

Such funds are to finance exports, import substitution and contingency plans to deal with an ailing domestic electrical sector.

Chávez said that the fund for exports would finance projects of cooperatives, small and medium-sized enterprises (SMEs) and entrepreneurship.

The fund intended to substitute imports will benefit producers of finished goods, and the third fund will finance a National Energy Plan.
It really gets me that these people can't or wont' understand what these numbers mean.

[hopefultxn]

Venezuela did institute a dual rate system last year, however they recently abandoned it, and gone back to just the higher rate of 4.30 bolivars to the dollar.

CARACAS, Dec. 30 (Xinhua) -- Venezula will replace dual currency exchange rates against U.S. dollar with a uniform rate of 4.30 bolivars, officials said on Thursday.

A parallel exchange rate of 2.60 bolivars for remittances, preferential goods and essential imports, such as food and healthcare supplies, will be scrapped as of Saturday, Minister of Planning and Finance Jorge Giordani told a press conference.

Adopting a uniform exchange rate was aimed at "simplifying transactions," he said.

Venezuela went through two straight years of recession with one of the world's highest inflation rates.

http://news.xinhuanet.com/english201...c_13672086.htm

[shela1153]

They have had two exchange rates going since 1995, now though they have changed or added some trade rules as far as exchange goes.
Decree No. 899 and Agreement No. 2 eliminate the single exchange rate by establishing a second rate of exchange. The purchase of foreign exchange from non-residents at the new rate of exchange has been criticized as discriminatory and even unconstitutional.

[shela1153]

don't miss the point, it is not 2 dollars and 60 per bolivar as is said in the j4dinar post or 4 dollars 30!

[shela1153]

I stand corrected on the dual system, yes they did abandon the system this year.
Foreign exchange | From January 1, 2011
Venezuela announces end of dual exchange rate
The official exchange rate was unified at VEB 4.30 per US dollar
Economy
As of January 1, 2011 the official exchange rate in Venezuela will be VEB 4.30 per US dollar, as announced by Minister of Planning and Finance Jorge Giordani.

Therefore, the move results in the elimination of the dual scheme that was in force during 2010, under which some sectors received US dollars at the preferential exchange rate of VEB 2.60 per US dollar and others, such as travelers, at VEB 4.30 per US dollar.

Everything was unified at the rate of VEB 4.30 per US dollar.

Normal operations of the Transaction System for Foreign Currency Denominated Securities (Sitme) will remain unchanged, said Giordani.

According to the official, the government adopted this measure because it places human beings at the center of economic decisions.

[shela1153]

http://www.bloomberg.com/news/2011-0...on-impact.html

Venezuela will raise regulated prices gradually on items such as milk, rice and corn flour in a bid to avoid an inflationary spike caused by the devaluation of its currency, said central bank board member Armando Leon.

“The government will not raise prices of regulated food immediately,” Leon, 49, said in a phone interview in Caracas. “The adjustments will be gradual in order to dilute the effect that these increases might have on inflation in the coming months.”

Finance Minister Jorge Giordani announced Dec. 30 that Venezuela would devalue the bolivar for the second time since January 2010. President Hugo Chavez’s government eliminated the 2.6 bolivars-per-dollar exchange rate on so-called essential goods, including food and medicine, weakening the rate to 4.3 bolivars per dollar.

The devaluation will add 2 percentage points to inflation this year, Leon said, after the central bank said consumer prices rose 26.9 percent in 2010, the most among 78 economies tracked by Bloomberg. Prices accelerated 5.2 percent in April 2010 compared with a year earlier after the government raised price caps on basic foods.

Venezuelan public and private companies have sufficient inventories of raw materials to avoid turning to more expensive imports immediately, thereby worsening inflation, Leon said.

Price Caps

Leon, one of five central bank directors, said there won’t be a further devaluation by weakening the exchange rate for the Sitme, which currently trades at 5.3 bolivars per dollar. The Sitme was established last year after President Hugo Chavez ordered a crackdown on brokerages and the dismantling of an unregulated currency market they administered, which is used by Venezuelans to obtain dollars when they can’t get permission from the government to buy at the official rate.

The central bank can guarantee enough bonds to supply the Sitme for the first half of 2011 and Venezuela has sufficient international reserves to meet its debt obligations in 2011, Leon said.

Nelson Quijada, president of the Venezuelan-Brazilian Chamber of Commerce and Industry, said it would be “impossible” to import goods if the government doesn’t raise regulated prices this month.

“It’s impossible to import products priced at a rate of 2.6 bolivars per dollar that have been bought at a rate of 4.3 bolivars per dollar,” he said.

Brazil, Venezuela’s fourth largest trade partner, exported around $3.6 billion to Venezuela in 2010, mainly in cattle, raw sugar, chicken and frozen meat, according to Brazil’s Foreign Commerce Secretariat.

Venezuela’s devaluation should benefit domestic production, said Leon.

“The unification of the currency rates will demand greater self-discipline from the public sector,” he said. “Last year the government imported too many basic goods at the 2.6 bolivars per dollar rate that could have been bought in the domestic market.”

To contact the reporter on this story: Corina Pons in Caracas at crpons@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

[hopefultxn]

From what I have read on Decree 899, the text of that decree aims it more at foreigners - whereas the dual rate system that was put into place by Chavez last year effected all Venezuelan nationals. It seemed to have been more of a 'luxury tax' than anything else.

But since it has since been repealed and the rate DEVALUED to 4.3 bolivar to 1 USD, it doesn't really matter.

Too bad the people of Venezuela have to be led by such a cancer to their country like Chavez.

[studdgage]

what is funny is the guru in this post is dogging the fx gurus lol stating they are wrong lol!!!!!!!!!!!! gotta love it!!!!!!!!!!!!