HANNAH DREIER, ASSOCIATED PRESS
54 MINUTES AGO
ReutersVenezuela's President Nicolas Maduro
See Also
A staggering plunge in the free-market value of Venezuelan currency sent people scrambling to sell off their depreciating bolivars Friday.
The widely followed website DolarToday, which tracks exchanges along the Colombian border, reported that the South American country's currency lost a quarter of its value over the last eight days.
The site's app has become so ubiquitous that everyone in smartphone-obsessed Caracas seemed to find out about the crash through 400 to the dollar at the same instant, as DolarToday sent out a series of alerts announcing the new numbers under the headline "hyperinflation!"
Venezuelan currency was trading at 415 bolivars per dollar Friday, according to the site. That's down from 300 bolivars per dollar on May 14. It stood at 173 when the year started.
While many black market dealers paused transactions until the rate stabilizes, some Venezuelans said they had changed money at the 400-bolivar rate Friday.
REUTERS/Carlos Garcia RawlinsVenezuela's annualized inflation rate reached 63.4% in August 2014, with consumer prices rising by 3.9% that month, the central bank said, reaching a fresh six-year high as President Nicolas Maduro wrestles to control spiraling prices.
It was not immediately clear what prompted the sudden drop, though a Barclay Capital Inc. report issued Friday described the underlying cause as government expansion of the money supply.
"We do not see any signal of change from the authorities but these risks should make them reconsider their policies," it said.
Barclays projected the Bolivar could dip as low as 600 to the dollar this year.
The administration of President Nicolas Maduro keeps tight control over the legal exchange of bolivars, using a byzantine three-tier system. It is meant to subsidize crucial imports, but has led to widespread corruption and speculation.
The strongest rate is 6.3 bolivars per dollar. The weakest official rate, which was billed as an alternative to the black market when it was rolled out earlier their year, has inched up to 200 bolivars per dollar. The fact many are willing to pay double that price for black-market dollars indicates the supply is limited.
The Maduro administration has been hoarding dollars as it grapples with falling oil prices. That has contributed to shortages and other economic distortions.
It was not immediately clear what prompted the sudden drop, though a Barclay Capital Inc. report issued Friday described the underlying cause as government expansion of the money supply.
"We do not see any signal of change from the authorities but these risks should make them reconsider their policies," it said.
Barclays projected the Bolivar could dip as low as 600 to the dollar this year.
The administration of President Nicolas Maduro keeps tight control over the legal exchange of bolivars, using a byzantine three-tier system. It is meant to subsidize crucial imports, but has led to widespread corruption and speculation.
The strongest rate is 6.3 bolivars per dollar. The weakest official rate, which was billed as an alternative to the black market when it was rolled out earlier their year, has inched up to 200 bolivars per dollar. The fact many are willing to pay double that price for black-market dollars indicates the supply is limited.
The Maduro administration has been hoarding dollars as it grapples with falling oil prices. That has contributed to shortages and other economic distortions.
DolarToday's homepage.
DolarToday is openly hostile to the socialist government and carries news stories attacking it. But the site insists its exchange rate reports are based on actual trades at exchange houses on the Colombian side of the border and are not manipulated to undercut the government.
In April, Maduro repeated his assertion that the site's shadowy managers, whose identities are not public, are collaborating with the speculators and opposition leaders he blames for the country's problems. He accused them of purposely sowing chaos and promised to have them arrested.
"We're going to put those people at DolarToday who are waging an economic war against Venezuela behind bars, sooner rather than later" he said.
The site, which is sometimes blocked within Venezuela, responded with a cheeky video documenting its popularity set to the club hit "Turn Down for What."
Source: http://www.businessinsider.com/currency-tumbles-as-venezuelans-look-to-offload-bolivars-2015-5#ixzz3au0sJyQt
DolarToday is openly hostile to the socialist government and carries news stories attacking it. But the site insists its exchange rate reports are based on actual trades at exchange houses on the Colombian side of the border and are not manipulated to undercut the government.
In April, Maduro repeated his assertion that the site's shadowy managers, whose identities are not public, are collaborating with the speculators and opposition leaders he blames for the country's problems. He accused them of purposely sowing chaos and promised to have them arrested.
"We're going to put those people at DolarToday who are waging an economic war against Venezuela behind bars, sooner rather than later" he said.
The site, which is sometimes blocked within Venezuela, responded with a cheeky video documenting its popularity set to the club hit "Turn Down for What."
Source: http://www.businessinsider.com/currency-tumbles-as-venezuelans-look-to-offload-bolivars-2015-5#ixzz3au0sJyQt
.
.
No comments:
Post a Comment