Financial Regulatory Forum

By Frank Jack Daniel

CARACAS, Jan 11 (Reuters) – Venezuelan bond prices leapt on Monday after President Hugo Chavez ordered a devaluation of the bolivar currency, a move that strengthens the finances of South America’s top oil exporter but risks alienating the leftist’s supporters.

Venezuela’s benchmark 2027 bond soared nearly 7 percent in price on Monday in trading on the first business day following the devaluation, announced by Chavez on Friday night.

The measure has triggered a frantic shopping spree in the capital Caracas, as people predicted the new dual currency system would lead to higher prices for imported goods.

“This is going to affect everything, and of course, the hardest hit are those of us who have the least,” said Rafael Acosta, 63, an employee of a store selling work clothes.

Under the new system, the bolivar is fixed at 2.60 per dollar for basic items like food and government purchases, with a second rate of 4.3 for goods deemed nonessential and for oil income.

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.

  By Frank Jack Daniel

CARACAS, Dec 6 (Reuters) – A senior minister and close confidant of Venezuelan President Hugo Chavez resigned on Sunday in a scandal that has shaken the OPEC nation’s banks and triggered a purge of businessmen with ties to the government.

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By Walker Simon and Eyanir Chinea

CARACAS, Dec 4 (Reuters) – Anxieties over the health of Venezuela’s financial system eased on Friday, with bonds rising after heavy losses this week as a paper reported a businessman agreed to hand over two institutions to the state.

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