Problem:

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.

Question:

Question 1: What was the percentage change in the value of the bolivar (against the dollar) in January? Show all work.

Question 2: What is the forecast value for June 2003? Show all work.