Venezuela’s Largest Banknote Now Worth 12 US Cents
EspañolThe black market for US dollars in Venezuela reached a new high on Tuesday, September 29, when the exchange rate for the nation’s currency rose to 816 Bs. The price marks an increase of 371 percent from the start of 2015. With the jump, the average monthly income for Venezuelans now sits at US$9.
The new value of the parallel currency is published by DolarToday, the only reference site that publishes the value of the US dollar in Venezuela. It calculates the exchange rate based on the operations that take place in the Colombian city of Cúcuta, on the border with Venezuela.
While the border remains officially closed at the command of Venezuelan President Nicolás Maduro, the currency exchange remains active in the form of online bank transfers, DolarToday reported. Maduro has previously called for the directives of the online pricing portal to be imprisoned.
— DolarToday® (@DolarToday) September 29, 2015
“At present, the US dollar trades at Bs. 816.00, while the Euro trades at Bs. 918.12, without obstacles.”
Supply and demand for trading the currency in its cash form has been reduced, since the largest denomination of 100 Bs. now buys just 12 US cents. However, this “has not been a determining fact in the price,” the report stated.
Black-market dollars are increasingly valuable due to the control exerted by Venezuela’s national government over the currency market within the country. Officials in the socialist regime decide who gains access to the currency, how much of it they can be awarded, and at what price.
Venezuelan economists argue that should currency controls continue in place, the parallel currency’s value will continue to grow. The government does not seem to have the political will to amend this situation, they explain.
The rise in the exchange rate has exceeded expectations and been driven by a combination of anxiety and inflation uncertainty. The annualized inflation rate is expected to exceed the 600 percent mark this year, according to Steve Hanke, professor of applied economics from Johns Hopkins University in Baltimore.