In February 1983 Venezuela adopted a multiple exchange rate regime as part of a package designed to deal with a balance of payments crisis. The idea was to ease the process of adjustment to a lower level of oil income and financial flows, so as to avoid more drastic measures. Initially, the program generated a rapid improvement in the current account while maintaining relatively low inflation, but it produced a surprisingly high and growing exchange premium. On two occasions, in February 1984 and in December 1986, the government was forced to devalue the official rate, not because of insufficient reserves, but due to the unsustainable level of the exploding premium. In February 1989, after 6 years of experimentation — in which the parallel exchange rate depreciated by a factor of 10 — and in the midst of a new balance of payments crisis, the government decided to abandon the regime and adopt a unified floating arrangement. This change was followed by a 9 percent drop in GDP and by a 60 percent jump in the price level.
Weitere Kapitel dieses Buchs durch Wischen aufrufen
- Adoption, Management, and Abandonment of Multiple Exchange Rate Regimes with Import Control: the Case of Venezuela
- Palgrave Macmillan UK
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