Macroeconomic Forecast Venezuela

December 2006 | Macroeconomic Forecasts

There has been a renewed drop in the Venezuelan bolivar parallel exchange rate (as measured by the 'CANTV dollar'), which depreciated by 8.0% from VEB3,277.89/US$ on November 24 to VEB3,539.53/US$ on November 27. This substantial decline vindicated our view that the rate could break through VEB3,500/US$. Besides increasing fears of accelerating inflationary pressures, which so have far accelerated the depreciation of the rate, heightened uncertainty before the elections could have also played a role in the recent move. In response to the rate's slump, the country's

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