With many merchants in Venezuela charging in dollars or their black market equivalent, many basic necessities — including food, dental and medical services — are now out of reach for a large number of locals.
According to news from Reuters, for more than a decade, strict exchange controls have severely limited access to dollars, and a black market in hard currency spread as a result.
The practice over the last couple of years to charge in dollars to a select group of expatriates or Venezuelans with access to the currency is growing. In fact, according to the opposition-led National Assembly, November’s rise in prices topped academics’ traditional benchmark for hyperinflation of more than 50 percent a month — and could end the year at 2,000 percent.
“I can’t think in bolívars anymore, because you have to give a different price every hour,” said Yoselin Aguirre, 27, who makes and sells jewelry in the Paraguaná Peninsula and has recently pegged prices to the dollar. “To survive, you have to dollarize.”
One Christmas tree in Maracaibo, the country’s oil capital, was even decorated with virtually worthless low-denomination bolívar bills.
But most Venezuelans, earning just $5 a month at the black market rate, cannot save hard currency.
In 2003, the socialist government of the late President Hugo Chávez brought in strict controls to curb capital flight. Oil revenue was initially able to boost artificial exchange rates, but the black market grew and is now becoming unmanageable for the government.
While President Nicolás Maduro has maintained those policies on capital controls, the spread between the strongest official rate, around 10 bolívars per dollar, and the black market rate, of around 110,000 per dollar, is now huge. As a result, Venezuela’s currency has weakened 97.5 percent against the greenback, meaning $1,000 of local currency purchased then would be worth just $25 now.
Maduro blames black market rate-publishing websites for inflating the numbers, which he claims is part of an “economic war” designed by the opposition and Washington to topple him.