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Venezuelan President Hugo Chavez.
Venezuelan President Hugo Chavez.
(REUTERS)

BREAKINGVIEWS

Venezuela devalues down the path of hyperinflation

Reuters Breakingviews delivers agenda-setting financial insight. Its global correspondents react to stories as they develop, delivering sharp and provocative commentary on big financial news as it breaks.

Venezuela’s 32-per-cent devaluation of its currency is a further step toward currency ruin. President Hugo Chavez claims his socialist-inspired policies are original, but cheapening the bolivar against the dollar follows the pattern of Argentina and others before 1995. Government largesse and inflation fuel further devaluations and more price increases. It’s a well-worn path to hyperinflation.