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Venezuela: Devaluation may be delayed until after elections

After the Venezuelan government devalued the official exchange rate peg against the dollar in January of both 2010 and 2011, speculation has been mounting that it will do so again soon. But while devaluation at some point this year seems inevitable, we suspect that it will be delayed until after October’s crucial presidential election. We therefore expect the exchange rate to end the year some 20% lower at 5.5/$.

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