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Chávez devalues under pressure


Chávez: living on borrowed time

Hugo Chávez is very good at alienating people. The Venezuelan president's revolutionary rhetoric and public friendship with Fidel Castro have long since made him an enemy of the US State Department; his authoritarian ways rub the domestic media up the wrong way; his pronouncements have set the Catholic church against him; his populism has enraged the middle classes; his refusal to respect the old divisions of power has meant frequent clashes with the unions; his unpredictability has resulted in increasingly high-profile members of the military demanding his resignation. Now his decision to devalue the bolivar seems set to lose him the backing of the one sector of the population that still supported him: the poor.

In truth, he had little choice. Capital flight had reached unsustainable levels and the Treasury was spending billions it could ill afford in a futile attempt to prop up a currency peg that no-one any longer believed in.

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