12 Feb 2018 | 09:15 AM UTC
Venezuela: Bolívar devalued amid new currency exchange system
Bolívar devalued following February 5 launch of new currency exchange system
Event
On February 5, Venezuela launched a new currency exchange system, reintroducing currency auctions. Following the opening of auctions, the bolívar plunged by over 80 percent to an exchange rate of 30,987 bolívars per euro, and 24,995 bolívars per US dollar.
The devaluation is expected to increase the price of imported products and food. Associated public demonstrations are possible.
Context
Venezuela had used strict currency exchange controls since 2003 to prevent the outflow of domestic capital.
Venezuela's current economic upheaval comes as the country is facing ongoing political violence amid a long series of crises affecting the restive country in recent months and years. The situation is worsened by major shortages of gasoline, medications, food, and other basic necessities, an alarming spike in rates of violent crime, massive inflation and economic recession, and a resurgence of disease.
Advice
Individuals in Venezuela are advised to closely monitor the situation, avoid all protests due to the likelihood of violence, remain vigilant at all times due to high crime rates, and avoid discussing political issues in public.
