Venezuela’s Currency Nosedives, Maduro Cracks Down on Telecommunications Price Hike
Puebla, Mexico, August 4, 2017 (venezuelanalysis.com) – Venezuela’s troubled currency has lost twice its own value over the past two months, according to the latest black market data.
The currency, the Bolivar Fuerte (BsF) was trading on Friday at 18,982.93 to the dollar, according to black market currency tracker dolartoday.com.
The figure is a new low for the decade-old currency, which for years has been bleeding value on the black market. The new low is likely bad news for the government, which for years has been tweaking currency policy in efforts to rebuild the BsF’s value.
Comparably, the unofficial exchange rate was closer to US$1=BsF6000 in late May, when the Venezuelan government unveiled its latest round of foreign exchange reforms. Critics say Venezuela’s exchange system is partly to blame for the BsF’s poor performance, while the government in Caracas maintains the currency is the victim of an “economic war”.
For years, Venezuela has used a complex, multi-tier exchange system. At the weakest official rate, DICOM, the government is currently selling the BsF for 2870 to the dollar, while the strongest controlled rate is US$1=BsF10.
No official data is available for 2017 inflation, though in June the opposition-controlled National Assembly claimed consumer prices rose 127.8 percent in the first five months of 2017.
President Nicolas Maduro has responded by vowing to fight price increases and protect consumer purchasing power. On Thursday, his government blocked a move by two major telecommunications firms to increase prices. Mobile giants Movistar and Digitel had planned to raise prices on August 1, though just two days later the National Telecommunications Commission said neither company had secured regulatory approval. Both companies have now been forced to roll back their price increases, and refund customers already charged under the new rates.
Published on Aug 4th 2017