Hello, and welcome to the Latin America Weekly newsletter! In this issue: Maduro’s new plan for the Bolívar. Pollution in Mexico. And Honduras’s controversial charter cities.
Venezuela tries to make Bolívar stronger
President Nicolás Maduro of Venezuela has launched a new plan to de-dollarize the economy, in a move to get USD 3 billion circulating in the country converted into the local tender, the Bolívar. The government hopes the move will rekindle trust in the currency, which has been trounced by hyperinflation and the deep socio-economic crisis that engulfed the country over the past decade.
The plan. To encourage the use of Bolívar, Venezuela introduced this year a 2-to-20-percent tax on financial transactions in foreign currency at banks and businesses.
- “Rich and big businesses put dollars in their pockets and don’t hand over to the Venezuelan state even one cent of those dollars which they use for transactions,” National Assembly President Jorge Rodríguez said at the time.
- President Nicolás Maduro once called the use of the dollar an “exhaust valve” to curb the crisis — helping Venezuelans trade in a stable currency. But now, Mr. Maduro wants to shut off this valve.
Why it matters. Since the tax became effective...