The Venezuelan political and economic crisis deepened in late 2002 and early 200

Question

The Venezuelan political and economic crisis deepened in late 2002 and early 2003. On January 1st, 2003, the bolivar was trading at Bs1390/$. By February 1st, its value had fallen to Bs1940/$. Many currency analysts and forecasters were predicting that the bolivar would fall an additional 30% from its February 1st value by June 2003.
a. What was the percentage change in the value of the bolivar (against the dollar) in January?

b. What is the forecast value for June 2003?

Explanation / Answer

a>Percentage Change=((1940-1390)/1390)*100 39.57 b>Forcast for June 2003 = X (X-1940)/1940=0.3 or, X=1940+1940*0.3 2522

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