Economic Cabinet agrees to devalue local currency
On 12 December 2012, members of the Economic Cabinet agreed on the need to devalue the local currency (bolívares) due to the excessive demand of U.S. dollars at an artificially cheap foreign exchange rate and the need to fill gaps in public accounts. Most analysts predicted devaluation and tax increases in the first quarter, economic downturn and inflation in the first six months, and a recovery period to follow. However, adjustment would be postponed for the second half of the year if President Hugo Chávez were to step down and new elections take place.
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