Venezuela - edge of today

[BABU_HYDERABADI]

Originally Posted by kkkk

Venezuelan president Madura appears to have taken a leaf out of Modi's book. He has ordered devaluation of the bolivar by loping of 5 zeroes of the old currency. To differentiate it from old currency, the re-valued currency is called sovereign bolivar. so what was earlier 1 million bolivar is now 10 soverign bolivar.

sounds to me like a good step. Ridiculous prices and inflation (of the order of thousands of percent!) - will they come down or not - needs to be seen. It could have been done better (even if these are early days) like not tagging it to the petro or making the process longer in some way. The country is surely about to go through a long paralysis period when everybody gets to grips with the new currency.


I have sometimes felt, we should do something similar in India..... imagine devaluing the currency by a factor of 10, so a sandwich which costs 50rs will cost 5rs - which is in line with the 'good times' I remember. Quite subjective I suppose... good India for my parents generation would probably peg the price of sandwich at 5paise.

what do you guys think?

Modi did not devaluate, it was Zimbabwe who did it. It did not work in Zimbabwe and it will not work in venezuela. I belive Zimbabwe did it more than two times and finally settled to use USD.

[kkkk]

Originally Posted by BABU_HYDERABADI

Modi did not devaluate, it was Zimbabwe who did it. It did not work in Zimbabwe and it will not work in venezuela. I belive Zimbabwe did it more than two times and finally settled to use USD.

who said Modi devalued the currency?

Zimbabwe's devaluation is bad implementation, Majority of the country uses USD for transactions... no comparison.

[sgars]

^^
You sound like saying this in the OP.

Originally Posted by kkkk

Venezuelan president Madura appears to have taken a leaf out of Modi's book. He has ordered devaluation of the bolivar by loping of 5 zeroes of the old currency.

[kkkk]

Originally Posted by sgars

^^
You sound like saying this in the OP.

what I meant was it was a risky decision that needed balls and was sudden. Modi's decision was a surprise at the time, it needed guts to be taken and was intended to improve the economy and help deal with black money.
Madura's decision was equally sudden, needed guts to be taken and intended to improve economy.

beyond that, devaluation and demonitisation are two different things...

[BABU_HYDERABADI]

Originally Posted by kkkk

who said Modi devalued the currency?

Zimbabwe's devaluation is bad implementation, Majority of the country uses USD for transactions... no comparison.

from your previous post

Originally Posted by kkk

Venezuelan president Madura appears to have taken a leaf out of Modi's book. He has ordered devaluation of the bolivar by loping of 5 zeroes of the old currency. To differentiate it from old currency, the re-valued currency is called sovereign bolivar. so what was earlier 1 million bolivar is now 10 soverign bolivar.

[kkkk]

Originally Posted by BABU_HYDERABADI

from your previous post

see my previous post. Maduro devalued currency, Modi demonetised. Demonitisation decision took guts - thats the leaf....

[sgars]

Looks like the sovereign bolivar didn’t help much. Even after hyperinflation, coffee seems cheap.

https://www.bloomberg.com/news/artic...s-on-wage-hike

So after President Nicolas Maduro raised wages by a staggering 150 percent last week -- the sixth minimum wage increase in 2018 alone -- perhaps it comes as no surprise that a cup of coffee in the Venezuelan capital of Caracas doubled from the week earlier to 400 sovereign bolivars or about ($0.76).