Protests, Seizures, and Currency Depreciation: Conditions in Venezuela continue to worsen

    Apr 26, 2017 @ 10:04 AM / by Morgan Grenier

    While the official exchange rate for Venezuelan Bolivares Fuertes is USD1.00=VEF10.00, the black market rate in Caracas on Friday, April 24th reached 4711.73 bolivars per USD, the highest in the country’s history, and a depreciation of 6.4% in the last week and 40.5% in the last month. A one hundred bolivar note is worth only 2 US cents on the black market. The Simadi rate, the lowest official tier of the government’s three tier foreign exchange, is also at its lowest value in its history at USD1.00=VEF715.39. Under that system, a one hundred bolivar note is worth about 14 US cents.

    Caracas, Venezuela as seen during a recent AIRINC on-site cost of living survey.  Photo taken by AIRINC Survey Manager, Anne Benjamin.

    Escalated Military Action by the Venezuelan Government

    In response to protests in the past week, the government has dispatched the military to the streets, set up roadblocks on highways, limited subway services, and in an especially controversial response, President Nicolàs Maduro announced that he would arm pro-government militias. This is likely to escalate the conflicts, and cause greater chance of harm to citizens, participants and bystanders. Expatriates should continue their current safety measures, especially avoiding crowds and demonstrations and avoiding travel at dusk or night.

    Government Seizure of Corporate Entities Continues

    In addition to blaming opposition members in the government, President Nicolàs Maduro has consistently blamed the United States, US companies, and US aid groups for the economic crisis. On Wednesday, April 19th the Venezuelan government seized a corporate automotive plant in Valencia and removed assets from the premises. With only $10 billion in national reserves, and a high risk of defaulting on debt this year, further asset seizures may take place. Economic factors and government rhetoric increase potential that foreign companies will be faced with trouble from the government.

    Global Mobility Concerns: Hardship

    AIRINC helps companies address expatriate compensation and mobility issues in a complex and ever-changing global environment through thought-leading advisory services, high quality data services, and leading-edge technology solutions.

    Hardship is subjective -- the evaluation of a location is typically biased by personal opinions and preferences.

    At AIRINC, our hardship team conducts a thorough evaluation in order to mitigate personal opinions and preferences and indicate as accurately as possible how expatriate locations compare around the world.

    Learn More

    Topics: Hardship, ALERT, Venezuela, AIRINC News, Insights and Experience, Caracas

    Morgan Grenier

    Written by Morgan Grenier

    Morgan graduated with a BA in Communications and Journalism from Simmons College, where she received a Gold Medal from the Columbia Scholastic Press Association. She joined AIRINC in 2016 as a Goods and Services Analyst. In this role, she aids in the quarterly analysis of survey data and evaluates hardship for AIRINC’s Hardship Database.