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Venezuela minister rules out currency devaluation

Venezuela`s economic minister has ruled out a devaluation of the nation`s currency, as the country struggles with soaring debt and inflation.



Caracas: Venezuela`s economic minister has ruled out a devaluation of the nation`s currency, as the country struggles with soaring debt and inflation.

Finance minister Marco Rodolfo Torres said in a television interview Sunday "no expected devaluation is expected."

A foreign currency crunch has led to shortages of basic goods and runaway inflation in Venezuela, which is heavily dependent on imports.

A number of economists have been calling for a devaluation of the bolivar and flexible exchange controls to revive the flagging economy.

Venezuela currently has three official rates for the bolivar but has sharply restricted the availability of dollars.

Due to the currency shortage airlines have reduced or suspended service to the country and automakers have shutdown assembly lines.

Venezuela`s budget deficit is 15 percent of gross domestic product and economists generally consider the bolivar overvalued.

A global drop in the price of oil has worsened the financial challenges for the country, which holds the largest oil reserves in the world.

Oil exports account for 96 percent of Venezuela`s hard currency income.

From Zee News

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