June 1 marked a day of changing times in Venezuela. The price of gasoline in the country has been among the lowest in the world for decades, and in recent years, currency depreciation has made the resource practically free.
For years, Venezuela’s currency (currently the VES, was VEF) was the only currency legal to use within the country. However, with hyperinflation and a rapidly depreciating currency, using the VES was often difficult. Although not technically legal, transactions would often still occur using U.S. dollars, as it is a stable currency.
While the world average price of gas has dropped from 1.43 USD per liter in 2014 to 1.17 USD per liter in 2018, prices have been trending upward in many countries including the Middle East, where gas prices typically see little change.
The economy of Venezuela continues to be one of the most volatile in the world. On Friday, August 17, President Nicolas Maduro announced the devaluation of the Bolivar Fuerte (VEF) from about 250,000 to 6,000,000 VEF to 1 USD.
Critics say this is merely a superficial solution and will do nothing to combat hyperinflation. This announcement followed presidential candidate Henri Falcon’s proposal to dollarize the Venezuelan economy.
President Maduro recently announced the creation of the Petro, Venezuela’s own cryptocurrency, backed by natural resources such as oil and gold.
On May 31, Venezuela announced the results of the first currency auction for its new DICOM exchange rate, the fifth such currency control mechanism introduced since 2003.
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
At the time of our survey, a kilogram of green apples was priced around 5300 VEF. With 100-bolivar notes, this purchase would require fifty-three bills.