BusinessGlobal Economy

Venezuelans race to spend before devaluation

PUBLISHED : Wednesday, 13 February, 2013, 11:58am
UPDATED : Wednesday, 13 February, 2013, 11:58am

Venezuelans swamped stores on Tuesday to snap up everything from washing machines to plane tickets in a last-minute wave of panic-buying ahead of a 32 per cent currency devaluation.

Venezuela will devalue its currency against the US dollar from Wednesday on the orders of President Hugo Chavez, who is convalescing in Cuba following cancer surgery in December.

Rolando Morales left the store with gear to set up in his new gym.

“I was thinking of buying them next month, but with the devaluation I bought what I could right now. If I had found a television set and a refrigerator I would have bought them too. They probably sold out on Friday,” he said.

Saisbel Pena was checking out the price of a vacuum cleaner at the Abasto Bicentenario, a government-owned chain store.

“I was going to look at the prices and see if I have enough to buy several things. It helps to protect yourself,” said Pena, a 31 year-old attorney.

“I want to buy things before the prices go up,” added Ricardo Vasquez, who had already bought a printer and was looking for a computer monitor for his dentist’s office.

He said he feared that prices “might rise between 30 and 40 per cent.”

The local currency, the bolivar, will fall from 4.3 to the dollar to 6.3 at the official exchange rate. The move was announced on Friday by Planning and Finance Minister Jorge Giordani.

Chavez hopes effect of the devaluation will be to make Venezuela’s exports cheaper and thus more enticing to buyers. Another is to cut the deficit, which in Venezuela last year was estimated to be nearly 10 per cent of GDP.

Venezuela has had foreign currency exchange controls since 2003.

Between Friday and Monday the phones did not stop ringing at Daccord Tours, and the travel agents said that they sold more in those days than in the whole month of January. “People are desperate,” sales manager Laura Bego told AFP.

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