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Experts claim that Hugo Chavez has not gone far enough in devaluing the so-called "strong Bolivar" for the second time since January.
The exchange rate on "essential goods" such as food and medicine will be lowered by 40 percent to 4.3 bolivars per dollar on Jan. 1, unifying its two fixed foreign exchange rates in bid to pull the economy out of recession.
“Devaluing has fiscal benefits but also hurts the country’s economic activity,” said economic professor Orlando Ochoa. “Clearly, this adjustment in the preferential exchange rate directly affects inflation for 2011.”
But the current rate in the black market is 8.2 bolivars to the dollar.
Venezuela currently has the world’s highest inflation rate.
