Venezuela’s currency has fallen so much so quickly that a dollar now buys 100 times as many bolivars in the black market as it does at the government-controlled rate.
The bolivar fell to a record 630.21 per dollar Tuesday in the illegal street markets where Venezuelans go to skirt limits on foreign-exchange purchases, compared with the official rate of 6.3 per dollar, data compiled by dolartoday.com show. The local currency has plunged 88 percent in the unofficial market over the past year and 34 percent in just the past month.
Inflation is the fastest in the world as President Nicolas Maduro’s administration prints more currency to pay budget expenses. Because of tumbling oil prices, the government gets fewer dollars from its exports and there’s a shortage of greenbacks, pushing Venezuelans to the black market when they can’t obtain government approval to access the legal rates. Venezuela has maintained strict currency controls since 2003.
“The government pretty much has stopped providing dollars to the private sector as it uses the dollars it has to buy food and basic goods,” Juan Pablo Fuentes, an economist at Moody’s Analytics in West Chester, Pennsylvania, said in an interview. “Those that are still importing goods are forced to go to the black market, and so demand for dollars continues to rise.”
Inflation soared to 69 percent in December, and the central bank hasn’t provided any further updates since then. Bank of America Corp. said last month that the country’s annual rate increased to 108 percent in May.