Venezuela launches crypto-pegged forex rate, devaluing by 96 percent


From Reuters
Friday, August 17, 2018

CARACAS -- Venezuelan President Nicolas Maduro announced today a single exchange rate and pegged it to his socialist government's petro cryptocurrency, effectively devaluating by 96 percent.

Maduro said he would overhaul Venezuela's disparate exchange rates and peg salaries, pensions, and prices to the petro, a cryptocurrency launched by the government this year. He said one petro would equal $60 and have the equivalent of 360 million bolivars.

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That implies a new exchange rate of 6 million bolivars per dollar, broadly on par with widely used black- market exchange rates, entailing a 96 percent devaluation compared with the current official DICOM rate of 248,832 bolivars per dollar.

Since 2003 Venezuela has had strict currency controls, identified by economists as a major cause of its economic crisis, which has spawned hyperinflation and rendered the bolivar currency near worthless.

"They've dollarized our prices. I am petrolizing salaries and petrolizing prices," Maduro said on state television tonight. "We are going to convert the petro into the reference that pegs the entire economy's movements." ...

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