Chevez Devalues Currency By 50%

cobraboy

cobraboy

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The DR is fully dependant on Venezuela for petroleum products.

Any speculation/guesses/predictions of how that might effect the DR?

I'm unclear on one issue: does the DR pay for the interest on the oil products in $RD or $US?

Opinions, please...
 
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A.Hidalgo

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My uneducated economic opinion is that by devaluing the Bolivar the DP would gain in the exchange rate. As an example if last week the exchange was 1 bolivar=RD20 pesos then with a devaluation of 50% 1 bolivar=RD10 pesos or am I missing something.
 
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bob saunders

bob saunders

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a.hidalgo said:
my uneducated economic opinion is that by devaluing the bolivar the dp would gain in the exchange rate. As an example if last week the exchange was 1 bolivar=rd20 pesos then with a devaluation of 50% 1 bolivar=rd10 pesos or am i missing something.
Click to expand...

wouldn't it go the other way?
 
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Tamborista

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A.Hidalgo

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bryan1258 said:
It's a ratio thing. Don't sweat it.
Click to expand...

I was looking at it from the point of view of a Venezuelan who goes to DR with bolivares. When he makes the exchange he will actually get less DR pesos because of the devaluation and the peso is strengthened. I believe that's right.
 
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bryan1258

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Does Charley Daniels play a mean fiddle? Are the Kennedys gun shy? Does raggidy Anne have cotton tits?
 
bob saunders

bob saunders

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Malibook said:
No.

If the Bolivar was devalued 50% relative to the Dominican peso, a Venezuelan who used to get 20 Dominican pesos per Bolivar would now only get 10.

The Dominican who used to need 20 pesos to buy a Bolivar would now only needs 10.
Click to expand...

If you read the comments on the second link you'll see how Venezuelans feel about it.

http://www.laht.com/article.asp?ArticleId=350148&CategoryId=10718
http://www.noticias24.com/actualida...ncia-la-devaluacion-del-bolivar-fuerte-a-430/
 
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cobraboy

cobraboy

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Remember the nasty inflation spike in the DR a few years back, and the lasting ripple effect of virtually EVERYTHING in the DR getting MUCH more expensive...especially for the lower income groups?

Venezuela was suffering 25% inflation as it is. Wanna bet that doubles or triples in the fairly short term?

I find irony in how Chavez has been beating up private business for years and now says he needs more production and efficiency.

I'm hoping the current DR political leaders are paying close attention to what is happening economically in Venezuela.
 
bob saunders

bob saunders

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cobraboy said:
Remember the nasty inflation spike in the DR a few years back, and the lasting ripple effect of virtually EVERYTHING in the DR getting MUCH more expensive...especially for the lower income groups?

Venezuela was suffering 25% inflation as it is. Wanna bet that doubles or triples in the fairly short term?

I find irony in how Chavez has been beating up private business for years and now says he needs more production and efficiency.

I'm hoping the current DR political leaders are paying close attention to what is happening economically in Venezuela.
Click to expand...

And the news keeps getting worse for Venezuelans: Tras pagar sobornos en Venezuela, m?dicos cubanos huyen a Miami - Noticias de Estados Unidos y Canad? - Mundo - ELTIEMPO.COM
 
Hillbilly

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I heard last year that of the "6000" Cuban doctors sent to Venezuela, "3000" have gone to Colombia..so there is probably something to that.

And this is also good news for Dominican bean farmers....we buy oil with beans...

HB
 
cobraboy

cobraboy

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Hillbilly said:
I heard last year that of the "6000" Cuban doctors sent to Venezuela, "3000" have gone to Colombia..so there is probably something to that.

And this is also good news for Dominican bean farmers....we buy oil with beans...

HB
Click to expand...
Beans, huh? How would they now be valued? A 50% discount? I say that because the petro dollars are what is really being devalued.

I also understood that it's only interest on loans for oil that is being paid. I recall a 20-year deal to pay off principal.
 
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ExtremeR

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cobraboy said:
Beans, huh? How would they now be valued? A 50% discount? I say that because the petro dollars are what is really being devalued.

I also understood that it's only interest on loans for oil that is being paid. I recall a 20-year deal to pay off principal.
Click to expand...

Nop, Bolivar is what is being devalued, the beans are valued at US$Dollars, not "Petro Dollar".
 
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