Venezuela: Economic Overview

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ECONOMIC OVERVIEW

Venezuelan President Rafael Caldera in April 1996 announced a series of fiscal and monetary reforms calculated to restore economic growth. Major measures implemented include increasing the price of gasoline fivefold; eliminating foreign exchange controls; establishing currency convertibility under a managed float system; freeing interest rates; eliminating most price controls; increasing the wholesale tax from 12.5% to 16.5%; and stepping up the timetable for the government's privatization program. The adoption of these reforms led to approval by the International Monetary Fund for a standby agreement to provide the country with financial assistance for an …