Venezuela's Currency Depreciation Prompts Inflation Fears

The Venezuelan government has allowed the bolivar to float after nine months, resulting in a currency depreciation and potential inflation rise. Analysts predict inflation could hit 40% in 2024 due to cheaper imports and reduced central bank dollar sales, affecting businesses and the local economy.

In a significant economic shift, Venezuela has permitted the bolivar currency to float, ending a nine-month peg to the dollar. This move has sparked fears of rising inflation as the bolivar depreciates, potentially reversing years of efforts to control hyperinflation.

Sources in the public and private sectors reveal that Venezuela's foreign currency sales are failing to meet demand, prompting challenges for its ailing economy. Analysts are predicting inflation could climb up to 40% by the end of 2024.

Businesses struggle to access dollars for imports, with central bank sales of foreign currency reducing significantly in recent months. Experts urge government reflection on foreign exchange policies, marking another chapter in Venezuela's ongoing economic challenges.

(With inputs from agencies.)