Venezuela has cut the value of its currency against the US dollar by 32%, in an effort to boost its economy.
The widely expected measure ramps up the official exchange rate of the bolivar from 4.3 to 6.3 per US dollar.
It was announced after Vice-President Nicolas Maduro’s return from Cuba, where he said President Hugo Chavez gave him instructions on the economy.
The leader has not been seen or heard in public since December, when he went to Havana for cancer treatment.
This is the fifth devaluation of the bolivar since Hugo Chavez’ administration started controlling the exchange rate, in 2003.
The previous devaluation was in 2010.
Venezuelan economics are not a straightforward business. For a typical housewife, for instance, this devaluation might not make a big difference to everyday life. Not immediately, that is.
She probably does not need to buy US dollars, but she will need to buy food and medicines from an importer as Venezuela relies largely on imports. The combination of exchange and price controls, imposed since 2003, have meant that many of those are difficult to find.
To get even basic products she already has to go on a tour of several stores and be alert and ready to buy when products turn up on the shelves. Or she must rely on a network of friends to alert her when milk, rice, flour, oil and others arrive at a particular shop. And when they do, she will only be allowed to buy a kilo or two. She will have no chance to stock up for herself or for others.
Even with government controls, the capital Caracas is among the most expensive cities in the world. Analysts hope devaluation will bring prices back to reality and stop the exhausting routine of product hunting. The distortions might still go on for a while. But some believe they cannot last forever.
Experts have long considered the bolivar overvalued and the move came as no surprise in the oil-based economy.
As oil exports are calculated in US dollars, a weaker bolivar should mean more cash for the government.
Strict controls to prevent currency going out of the country mean that dollars are normally hard to get in Venezuela, but in recent times this situation had become acute, says the BBC’s Sarah Grainger, in Caracas.
Dollars have been trading at four times the official rate on the black market.
In a country that largely depends on food imports, the scarcity of dollars also led to shortages of products such as sugar and flour.
The new exchange rate is expected to address this situation.
But the measure is also expected to have an impact on the inflation, which has already been climbing.
The leader of the opposition, Henrique Caprilles, criticised on Twitter the fact that the government announced the devaluation on Carnival Friday in South America.
The opposition says the government has waited until after the elections to take the necessary steps in the economy.
“They’ve spent the money on the campaign, corruption and presents overseas,” wrote Mr Caprilles, who lost the presidential elections to Mr Chavez last year.
Mr Chavez went to Cuba on 8 December to treat an undisclosed cancer and has not been seen or heard from since.
Mr Maduro recently said the president was “battling on” and had entered a new stage of treatment, after successfully finishing the post-operative phase.