Crisis in Venezuela: the price of the dollar exceeds one million bolivars

In November alone, the local currency was devalued by 50%. According to the site “Dolar Today”, a dollar costs 1,010,242 bolivars.

The price of the dollar in the parallel market of Venezuela surpassed this Tuesday the million bolivars, after several days of increasing the price of this currency in the country while the national currency has devalued more than 50 % so far in November.

This Tuesday, the portal Dolar Today, which is used as a reference to know the price of the currency in the country, published that a dollar cost 1,010,242 bolivars, while a euro was bought for 1,101,164 bolivars.

The various web pages that measure the price of the parallel market in Venezuela placed the price of the dollar around 960,000 bolivars at the end of Monday, when the Central Bank (BCV) did not present the official average for the first time in months.

According to the latest publication of the BCV, which has not been updated since last Friday, one dollar costs 782,025 bolivars in the country, which reflects an official devaluation of 51.58% so far in November.

However, the price of the parallel market, which governs almost all operations trading in Venezuela shows that the bolivar has depreciated by 93% against the dollar this month.

Thus, the legal minimum wage of 400,000 bolivars per month, received by about 10 million workers and retirees, is located at 0.50 cents on the dollar or less, depending on the quotes taken as a reference.

Meanwhile, a family needs $ 283 per month to eat and pay basic expenses, according to estimates by the Center for Documentation and Social Analysis (Cendas).

Only during the past week, the bolivar lost 14.75% of its value against the dollar, according to BCV estimates.

The bolívar has undergone two processes of monetary reconversion: in 2008, it lost three zeros and was renamed bolívar fuerte, while, in mid-2018, it had another five zeros subtracted with what was renamed the sovereign bolívar, the current one.

The bolivar, also tremendously devalued by a hyperinflation that this year already exceeds 3,000% according to the data of Parliament -in opposition hands- has gone through two processes of currency reconversion: in 2008, it lost three zeros and was renamed bolívar fuerte, while in mid-2018, another five zeros were subtracted with what was renamed the sovereign bolívar.

Faced with this instability of the local currency, Venezuela lives a de facto dollarization process or “spontaneous”, so that most of the products offered for sale are calculated in dollars, and there is the possibility of paying in foreign currency or in bolivars.

In these cases, businesses usually look at the parallel market exchange rate and not the official one.

This type of payment has spread even in the most popular areas, where the calculation of prices is already done in dollars.

Those who wish to pay in bolivars must do so with debit cards, since the banknote with the highest denomination is 50,000, that is, less than 10 cents on the dollar.





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