Vzla: Socialism really works

Venezuela devalued its currency 17 percent, a move that analysts such as BBVA Securities' Juan Pablo Chavez said will narrow the budget deficit.

The government devalued the bolivar to 1,918 bolivars per dollar from 1,598, the Official Gazette said. The government fixed the exchange rate at 1,598 in February 2003 and restricted dollar purchases to reverse a decline in foreign reserves.

``This improves their capacity to pay their domestic debt because it reduces the overall value of that debt'' in dollar- terms, BBVA's Chavez said. ``This also improves the revenue side of their budget.''

Venezuela funds about 40 percent of its budget with dollar- denominated oil exports. This year's budget forecast an average exchange rate of 1,920 per dollar.

I don't know too much about economics, but this is growing to play hell with that $2,000 U.S. that Venezuelans traveling abroad are allowed to spend on credit card purchases.