Venezuela’s Currency Takes Another Dive

Puebla, Mexico, November 25, 2016 (venezuelanalysis.com) – Venezuela’s beleaguered currency looked set Friday to lose around half its value in a month.

The currency, the Bolivar (BsF) has lost over 40 percent since the start of November, according to unofficial exchange tracking website Dolartoday.com.

As of midday Friday, the BsF was trading at 2752 to the dollar on the black market, according to Dolartoday’s figures. The lowest official rate stands at BsF 662=US $1.

Comparably, at the start of November, the black market rate was closer to BsF1500 to the dollar. November was the second month in a row to see a massive devaluation of the BsF, after it lost a third of its value in October. The October crash followed President Nicolas Maduro’s announcement that the government would raise wages by 50 percent. It also came in the wake of Maduro ordering the Central Bank of Venezuela to increase the money supply by 4 percent.

At the time, Venezuela expert Greg Wilpert said the October slump was likely due to a mix of economic and political factors.

“It’s hard to say how much is political and how much is economic, but if I had to guess, I would say it’s about 50-50,” he told Venezuelanalysis.

The November crash is the worst fall for the BsF in any given month since the currency was introduced in 2008, according to an analysis by Bloomberg. It came as Venezuelan companies began distributing Christmas bonuses to workers ahead of the holiday season, and dialogue between the government and opposition has been apparently stalled.

The Venezuelan government has blamed the country’s spiraling inflation on an economic war. President Nicolas Maduro has also lashed out at Dolartoday in the past, accusing the website of manipulating the value of Venezuela’s currency.

Over the weekend, The Wall Street Journal revealed Dolartoday is run by Gustavo Diaz, a US-trained, former Venezuelan colonel. Diaz was involved in a short lived coup against Maduro’s predecessor Hugo Chavez in 2002.

During the coup, he acted as deputy security chief to Pedro Carmona, a businessman who declared himself interim president after Chavez was kidnapped by rogue military personnel. Diaz now lives in Alabama, where he works at a Home Depot store.