The fictional dollar gets a little bit less fictional

Monopoly Money
Still fake

And so it’s official: the bolivar has been devalued to Bs.6.30:$1, with the never-well-pondered SITME mechanism abolished.

On paper, a 46.5% 31.7%* devaluation should be huge news. The reality is that after years of accumulating overvaluation, Bs.6.30 is still light years from a realistic value for the a US dollar. Importers’ access to dollars may improve somewhat on the margin, but no more than that.

It will do somewhat more to ease the central government’s finances by turning the same number of petrodollars into more bolivars the government can spend. Inevitably, it will also fuel higher inflation.

When the smoke clears and the mirrors are packed away, we’ll be left with a more cash-flush government, a less cash-flush populace, and with all of the pre-existing distortions and absurdities somewhat attenuated, but very much in place.