Venezuela's economic, political woes knock its currency to its knees

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http://articles.latimes.com/2013/aug/15/world/la-fg-venezuela-devalue-20130816

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Venezuela's official exchange rate for its currency, the bolivar,… (Juan Barreto / AFP/Getty…)BOGOTA, Colombia — Capital flight, political instability and misguided attempts to rein in double-digit inflation are being blamed for the weakening of Venezuela's currency on the black market, where it has fallen more than 75% against the U.S. dollar since April.

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The official exchange rate is 6.3 "Bs" to the dollar through government agencies, although that price is rarely available. Venezuelan individuals and businesses needing dollars for foreign travel or to import goods and services generally must resort to the black-market exchanges.

Alejandro Arreaza, Latin America economist for Barclay's Bank in New York, said the government had fed the inflationary fires by beginning to print huge quantities of money last year, money used to underwrite voter giveaways aimed at boosting Chavez's popularity during his reelection bid in October and Maduro's bid in April.

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"The slowdown in economic growth, high and persistent inflation and high levels of scarcities [of basic foodstuffs] will combine to make Venezuela's the worst-performing economy on the continent, despite the extraordinary oil boom that the country is still benefiting from," Puente said.