The unofficial exchange rate in Venezuela has broken through 500 bolivars per dollar to reach a new record low on Friday, according to DolarToday.
The unofficial exchange rate in Venezuela has broken through 500 bolivars per dollar to reach a new record low on Friday, according to DolarToday, the most popular exchange rate reference website in Venezuela, as the socialist-run country’s currency control system struggles to meet a strong demand for the U.S. dollar.
On Friday, Venezuela’s unofficial exchange rate weakened to a record 501.21 bolivars per dollar, marking a 65 percent plunge so far this year, according to DolarToday.
— DolarToday (@DolarToday) July 4, 2015
In the OPEC nation of Venezuela, a severe recession and a fall in global oil prices have significantly hampered its ability to provide U.S. dollars through their complex three-tiered currency control system.
Critics have blasted Venezuelan President Nicolás Maduro for failing to take urgent measures to ease or phase out the nation’s currency controls, which have crimped imports and have caused severe shortages of goods, such as food, medicine, and parts.
“As long as they don’t make the adjustments the economy needs, the rate will continue to increase,” said Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica.
In 2013, Maduro banned several internet websites, including DolarToday, to prevent its citizens accessing the country’s exchange rates. Maduro also said that DolarToday is part of a broader right-wing campaign to sabotage his government and has accused them of fueling an “economic war” and claims that they are manipulating the exchange rate.
A plunge in the country’s currency, in addition to surging inflation, has sent prices through the roof across the country as citizens struggle amid a monthly minimum wage that is equivalent to around $15 on the unofficial exchange rate. DolarToday estimates that Venezuela’s current inflation is at 68.5 percent.
Indeed, the prices have soared, and a brand new iPhone 6 on a local Venezuelan e-commerce site will cost around 300,000 bolivars—or about $47,250, according to the official exchange rate.
In December 2014, Bank of America warned that Venezuela needed to devalue the nation’s currency or risk inflation topping 1,000 percent.
Societe Generale — among others — has warned that Venezuela will likely default in 2015.