Venezuela has cut the value of its currency against the US dollar by 32%, in an effort to boost the country’s economy.
The widely expected measure ramps up the official exchange rate of the bolivar from 4.3 to 6.3 per US dollar.
The move was announced after Vice-President Nicolas Maduro’s return from Cuba, where he said President Hugo Chavez gave him instructions on the economy.
Hugo Chavez has not been seen or heard in public since December 2012, when he went to Havana for cancer treatment.
This is the fifth devaluation of the bolivar since Hugo Chavez’ administration started controlling the exchange rate, in 2003.
The previous devaluation was in 2010.
Experts have long considered the bolivar overvalued and the move came as no surprise in the oil-based economy.
As oil exports are calculated in US dollars, a weaker bolivar should mean more cash for the government.
Strict controls to prevent currency going out of the country mean that dollars are normally hard to get in Venezuela, but in recent times this situation had become acute.
Dollars have been trading at four times the official rate on the black market.
In a country that largely depends on food imports, the scarcity of dollars also led to shortages of products such as sugar and flour.
The new exchange rate is expected to address this situation.
But the measure is also expected to have an impact on the inflation, which has already been climbing.
The leader of the opposition, Henrique Caprilles, criticized on Twitter the fact that the government announced the devaluation on Carnival Friday in South America.
The opposition says the government has waited until after the elections to take the necessary steps in the economy.
“They’ve spent the money on the campaign, corruption and presents overseas,” wrote Henrique Caprilles, who lost the presidential elections to Hugo Chavez last year.
Hugo Chavez went to Cuba on December 8 to treat an undisclosed cancer and has not been seen or heard from since.
VP Nicolas Maduro recently said the president was “battling on” and had entered a new stage of treatment, after successfully finishing the post-operative phase.