The result of the Venezuelan government’s decision to allow the country’s currency, the bolivar, to float freely, has been a rollercoaster ride for many, with consumers at the mercy of unscrupulous merchants.

The National Shoe Fair, held at the Caracas Hilton from 17th to 20th February, was deeply affected by the situation. Many manufacturers did not have price lists while components suppliers wanted to price products in dollars - causing an impasse for the newly united footwear and components association Cavecal.

Worse news is likely for the footwear industry in Venezuela, however, with many observers expecting footwear demand to fall drastically in 2002 as a result of the expected inflationary boost the devaluation will give to the economy.

President Chávez announced the decision to float the bolivar and the abandonment of the "band system" in a televised address to the nation on February 12, 2002. The system had controlled the descent of the currency in the last five years but was costing too much. The Central Bank of Venezuela was spending its international reserves at an alarming rate to control the bolivar’s fall.

In a single day the currency rose from Bs.795 to Bs.1100 and back to BS.850 in relation to the dollar. The Venezuelan Consumer Protection Association has already started closing down businesses accused of overt price "speculation" while the main five banks have lifted their interest rates to almost 100%.