Venezuela Currency Loses 45% This Month as Hyperinflation Escalates
The Venezuelan bolivar has lost 45% of its value against the US dollar so far this month, the biggest monthly decline ever. Officially it takes 10 bolivars to buy a US dollar. On the black market, it takes 2,753 bolivars.
Venezuela’s currency is weakening beyond levels that analysts had forecast just a few weeks ago, as an expanding money supply chases a limited amount of US dollars.
The currency has lost 45% of its value so far this month, the biggest monthly decline ever, according to Bloomberg.
Venezuela has maintained strict currency controls since 2003 and currently has two legal exchange rates—the Dipro and Dicom rates—of 10 and 661 bolivars per dollar used for priority imports.
Mish discusses Dipro and Dicom; travellers’ dollars; and the state oil company’s position.
As social pressures mount, President Nicolás Maduro will be forced to use more reserves to buy food and other goods to stave off unrest.
How much of those reserves padded corrupt politicians’ pockets exchanging 10 bolivars for one US dollar at the official exchange rate?