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Businesses turn to dollar in fiercely anti-American Venezuela as currency crashes
By Hannah Dreier
Associated Press
via Minneapolis Star-Tribune
Saturday, May 24, 2015
CARACAS, Venezuela -- It's still possible to buy a gleaming Ford truck in Venezuela, rent a chic apartment in Caracas, and snag an American Airlines flight to Miami. Just not in the country's official currency.
As the South American nation spirals into economic chaos, more products are not only figuratively out of the reach of average consumers but literally cannot be purchased in Venezuelan bolivars, which fell into a tailspin on the black market last week.
Businesses and individuals are turning to dollars even as the anti-American rhetoric of the socialist administration grows more strident. It's a shift that's allowing parts of the economy to limp along despite a cash crunch and the world's highest inflation. But it could put some goods further out of reach of the working class, whose well-being has been the focal point of the country's 16-year-old socialist revolution.
... Dispatch continues below ...
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The latest sign of an emerging dual-currency system came this month when Ford Motor Co. union officials said the company had reached a deal with officials to sell trucks and sport utility vehicles only in dollars.
A few weeks earlier American Airlines announced that it had stopped accepting bolivars for any of its 19 weekly flights out of Venezuela. Customers must now use a foreign credit card to buy the tickets online. Virtually all other foreign carriers have made the same switch with the government's consent, according to the Venezuela Airlines Association.
Driving the shift is the crumbling value of the bolivar, which has lost more than half its value this year, plunging to 400 per dollar on the free market as Venezuelans scramble to convert their savings into a more stable currency. Desperate, people are selling bolivars for a rate 60 times weaker than the strongest of country's three official exchange rates. ...
... For the remainder of the report:
http://www.startribune.com/businesses-quietly-switch-to-dollar-in-social...
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