The bolivar has declined the most in 10 months as Venezuelans use their Christmas bonuses to buy U.S. dollars amid the world’s fastest inflation and shortages of basic goods.
A dollar fetched a record 127.24 bolivars on the Colombian border yesterday, compared with the official exchange rate of 6.3 bolivars, according to dolartoday.com, a rate-tracking website. The currency has lost 19 percent of its value in unofficial trading so far this month.
Consumer price increases and shortages of everything from cars to milk are pushing Venezuelans to buy greenbacks, said a black market currency trader in Caracas, who asked not to be named because the activity isn’t legal.
The trader said demand for dollars is the highest he has seen since hyperinflation in 1996. Money supply rose 6.4 percent in the second week of November as workers received their traditional annual bonuses known as “aguinaldos,” according to data compiled by Bloomberg. That was the biggest increase since October 2009.
Consumer prices surged 63 percent in August, the last figures available, as stricter allocation of dollars through official channels crippled imports and domestic production.
Venezuela’s economy will contract 3 percent this year, the biggest decline in the Western Hemisphere, according to International Monetary Fund.
President Nicolas Maduro last week used expiring decree powers to sign 28 economic laws ranging from higher alcohol taxes to anti-monopoly rules aimed at boosting fiscal revenue and restarting growth. He ordered that $4 billion from Chinese loans be added to foreign reserves.
The country’s benchmark bonds due 2027 has gained 1 percent since the announcement of the laws to 56.26 cents on the dollar.
bloomberg.com
A dollar fetched a record 127.24 bolivars on the Colombian border yesterday, compared with the official exchange rate of 6.3 bolivars, according to dolartoday.com, a rate-tracking website. The currency has lost 19 percent of its value in unofficial trading so far this month.
Consumer price increases and shortages of everything from cars to milk are pushing Venezuelans to buy greenbacks, said a black market currency trader in Caracas, who asked not to be named because the activity isn’t legal.
The trader said demand for dollars is the highest he has seen since hyperinflation in 1996. Money supply rose 6.4 percent in the second week of November as workers received their traditional annual bonuses known as “aguinaldos,” according to data compiled by Bloomberg. That was the biggest increase since October 2009.
Consumer prices surged 63 percent in August, the last figures available, as stricter allocation of dollars through official channels crippled imports and domestic production.
Venezuela’s economy will contract 3 percent this year, the biggest decline in the Western Hemisphere, according to International Monetary Fund.
President Nicolas Maduro last week used expiring decree powers to sign 28 economic laws ranging from higher alcohol taxes to anti-monopoly rules aimed at boosting fiscal revenue and restarting growth. He ordered that $4 billion from Chinese loans be added to foreign reserves.
The country’s benchmark bonds due 2027 has gained 1 percent since the announcement of the laws to 56.26 cents on the dollar.
bloomberg.com
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