Appreciation Pressures Building?May 2006 | Economic Analysis
The Bolivar's fixed peg has been held steady at VEB2,144.60/US$ since the beginning of March 2005. The central bank had previously effected two devaluations since the current fixed peg regime was introduced in February 2003, but downside pressures on the currency are now few and far between. With oil revenues continuing to flood in, the next currency move should be upwards. Indeed, a recent IMF report recent called for a reassessment of the exchange rate regime - a call that the Bolivarian government is unlikely to heed.
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