CARACAS, Jan 8 (Reuters) – A senior Venezuelan government official told Reuters on Friday to be “alert” to an imminent economic announcement, with traders saying they were hearing a devaluation of the bolivar currency was coming.
The bolivar has been fixed at 2.15 to the dollar since 2005, but it trades on a parallel black market at way over that rate. The bolivar weakened on Friday from about 5.90 to 6.10 to the dollar in parallel trade, on the rumours of a devaluation.
“Today’s move in the parallel market has been mainly due to expectations in the financial market — non-official and not confirmed — of a possible devaluation this weekend,” one trader said in an email communication to clients.
President Hugo Chavez was due to hold a cabinet meeting from 5 p.m. (1630 EST) on Friday.
A senior member of Chavez’s economic team told Reuters that an announcement of some sort was coming. Asked if it could be a devaluation, he said: “Yes, of course, we must be on alert.”