44% chopped off the Bolivar, at least for the private sector. Note cut is to scale
Just a short note on the fact that the Venezuelan Government just implemented a stealth devaluation by inviting to a Sicad auction (where the price is almost twice the official rate of exchange) for the following items:
-Food Industry: Corn flour, wheat flour, corn oil, rice, pastas and cereals.
-Paper, carton and wood
-Health Sector and raw materials for the pharmaceutical sector and vitamins, including ophthalmology.
Clearly, the Government does not want to announce a devaluation which shows there is some fear. The problem is that if companies imports at Bs. 11.3, the Sicad rate raw materials for regulated and controlled items, these prices have to be raised. The same with pharmaceuticals, etc.
Of course, we don’t know if it is that the Government plans to devalue later, will keep importing for itself at Bs. 6.3 per US$, what will happen with Sicad, if all imports will be done at Bs. 11.3 per US$ etc. But for now, this is simply a devaluation of 44.2% for the private sector, which will make inflation soar again.
But the distortions remain in place.