Bolivar lost 58% of its value in three months. Last Minute WORLD, CURRENT headlines and events
The official exchange rate of the dollar in Venezuela, which was 8.37 bolivars three months ago, has risen to 19.9 bolivars today. After 7 years of decline, the country achieved double-digit growth last year, and inflation, which started to pick up again in the second half of the year, is worrisome.
In Venezuela, which ended hyperinflation by meeting an inflation condition below 50 percent for 12 consecutive months, which was adopted as a condition to exit hyperinflation in January last year, although growth of more than 15 percent was announced in the first three quarters of last year. Last year, according to official data, the rise in the exchange rate and the high level of inflation raised concerns.
The exchange rate of the dollar, which was 8.37 bolivars (Bs) on October 18 last year, has now reached 19.9. This increase means that the Venezuelan currency has lost 58% of its value in the last three months and 77% in a year.
Tamara Herrera, director of Sintesis Financiera, an economic and financial advisory service in Venezuela, says developments in recent months in a country where prices are fully dollar-denominated or indexed to the dollar raise concerns that hyperinflationary conditions may be returning.
Speaking to VOA, Herrera said the government’s most important strategy to reduce inflation and ensure exchange rate stability is to collect the bolivars in circulation by issuing foreign currency to the market every week, thus satisfying the market’s need for dollars and preventing the depreciation of the national currency. He said the problems had reappeared.
Tamara Herrera, Director of Sintesis Financiera
“The government refrains from any action that could increase the number of bolivars in circulation, including raising wages, in order to maintain price and exchange rate stability. However, at this point, government spending has increased as people, especially civil servants, can no longer support their lives, and this situation increases inflationary pressures.
Noting that, according to his calculations, the inflation rate in December was only 42 percent, the economist said that if the Central Bank has difficulty meeting the need for dollars in 2023, they expect inflation to exceed 400 percent and that the inflation trend will decrease. may have come to an end.
The sectors most affected by inflation and exchange rate appreciation in the country are civil servants and pensioners, who are paid in local currency.
The minimum wage, which the government set at 130 shillings last March, was around $30 at the time, but is below $7 today due to the depreciation of the bolivar.
Studies show that the cost of a mandatory kitchen for a family of 5 in the country is over $350.
broadcast by Voice of America Bolivar fell 58 percent in three months in the news houra-ber.com editors have no editorial intervention. Bolívar’s quarterly news has lost 58 percent of its automatic publication on our website as it comes from the Voice of America website. in this district Bolivar fell 58 percent in three months The legal addressee of the news is the websites and agencies that published the news.
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