The Venezuelan Bolivar Black Market
How do companies survive when their
own disposal makes it nearly impossible
to exchange domestic bullion for foreign gold?
Rumor has it that during the year and a half that Venezuelan death chair Hugo ChÃ¡vez spent in jail for his role in a 1992 coup attempt against the government, he was a voracious reader. also bad his prison syllabus seems to declare been so insufficient on economics and so heavy on Machiavelli.
currency Fun in the Venezuela of Hugo ChÃ¡vez,
The Economist, February 13, 2004.
Santiagos once-thriving pharmaceutical dispersal business in Caracas, Venezuela, has hit hard times
Since ceiling controls were apply in February of 2003, dollars had been hard to come by
He has been forced to chase after various methods methods that were more expensive and not always effective to obtain dollars, causing his margins to decrease by 50%
The Venezuelan currency, the bolivar (Bs), had been recently repeatedly devalued
This had instantly squeezed his margins as his costs have risen directly with the exchange rate
Santiagos warm problem is that he needs to get his hands on hard currency US dollars
He could not scram anyone to sell him dollars
His customers needed supplies and they needed them quickly, but how was he expiration to come up with the $30,000 the hard currency to pay for his intimately recent order?
Exhibit 1 Venezuelan authorized and Gray Market Exchange Rates, Venezuelan Bolivar/U.S. Dollar (January 2002 marching 2004)
Why does a dry land homogeneous Venezuela impose capital controls?
In the case of Venezuela, what is the difference between the gray trade and the black market?
Create a financial outline of Santiagos choices and use it to make a suggest a solution to his problem.
Why does a country like Venezuela impose capital controls?
Capital controls allow a country to preserve a fixed rate of exchange for its currency without risking its holdings of hard currency or foreign...If you want to get a full essay, order it on our website: Orderessay
If you want to get a full essay, wisit our page: write my essay .