Most Venezuelan economists simply assume the government has no choice but to devalue, and many are predicting this in the short term. But without any real grasp on the shape of public finances as well as lenders’ willingness to provide financing, it is not clear that the day of reckoning is around the corner. True, official dollars are scarce, which would suggest devaluation is in the works. However, this could also suggest that the government is biding its time, waiting to open its coffers when the election is announced.
In a country where few things are certain, one thing is clear: chavismo will do anything it takes to win an election. If that means postponing painful decisions until after the ballots have been counted, so be it. This will be bad for the economy but good for Maduro’s chances of holding on to power.