Venezuela’s Bolivar Falls to Record Low on Demand for Dollars

[naaman fletcher]

April 7 (Bloomberg) -- Venezuela’s bolivar fell to a record low in unregulated trading as the central bank refrains from selling dollar debt in the local market to meet demand for U.S. currency.
The currency sank 1.8 percent to 7.10 per U.S. dollar, the weakest level since President Hugo Chavez imposed currency controls in 2003, before paring losses to close at 7.02, traders said. Venezuelan companies and individuals turn to the so-called parallel currency market when they can’t get government approval to buy dollars at the official rates of 2.6 and 4.3 bolivars per dollar.

http://www.businessweek.com/news/2010-04-07/venezuela-s-bolivar-falls-to-record-low-on-demand-for-dollars.html

[protocol rv]

1. It's going to get a little frenetic around here

That statement Chavez made about nationalizing rental housing is going to make people start selling as fast as possible. And they'll want their money out of the country immediately. This means there may be a feeding frenzy for dollars, and the Central Bank isn't about to put them on the market. Inflation and the parallel bolivar reinforce each other, so this is going to get really grim unless the government says Chavez was joking. On top, it's going to be impossible to find a place to rent.