The Strategist

Fall of the Venezuelan currency accelerated

04/06/2018 - 12:22

The rate of the Venezuelan currency has fallen more than previously thought, and the indicators on the shadow market also emphasize the strongest decline, reports Bloomberg.

Eneas via flickr
Eneas via flickr
Prices on the closely monitored resource, which is known angering President Nicholas Maduro on state television, lagged behind other markers that show prices 30% lower.

Although the American website listed a rate of 251 thousand bolivars for $ 1, the DolarPro rate is 362 thousand, and the electronic wallet AirTM sells dollars for 313 thousand bolivars each.

"It's about trust, and Venezuelans believe their dollars are worth more than DolarToday rates," said Henkel Garcia, director of the consulting company Caracas Econometrica. "New indicators will appear in the market where information is missing, and consumers will ultimately determine their selling price".

Since Venezuelans have limited access to official currency markets, they rely on sites that track changes, as well as on small exchange platforms, to understand what their currency is worth.

Prices in the country jumped by 6147% in the 12 months to February. These values are similar to information of independent economists.

Inflation was 80% in February 2018, lawmakers of the opposition said. In the midst of economic crisis, millions of citizens of the country have no access to basic drugs or food.

"We should be prepared for inflation at 131985% if the current situation continues," Angel Alvarado, an opposition legislator and economist, wrote on Twitter.

Critics say that it's all fault of the late President Hugo Chávez and his control of hard currency imposed 15 years ago, and an excessive money printing. The Venezuelan bolívar's rate fell by  nearly 100% against the dollar over 2017.

President Nicolas Maduro himself and his administration believes that the problems were caused by the economic war headed by business leaders and opposition prompted by Washington.