Economy - - Nov 30,2016
Venezuela’s already deteriorating currency hits the lowest-ever mark after losing 55% of its value
In November, the Venezuelan currency stumbled by 55% and it appears to be continuing towards the same decline, just more rapidly. Venezuelan inflation is one of the most recent signs of the country’s extreme political, economic and humanitarian crisis. Forever plagued by sky high prices or shortage of basic food and medicine; Venezuela’s condition seems to only worsen.
The country which has been in heavy recession since the last three years saw its currency and with it its economy fall faster than the people could say ‘fall’. By the starting of November, the currency which weighed 1,567 bolivars against one dollar; to the country’s horror fell at 3,480 bolivars per dollar, as per the widely used ‘Dolartoday’ monitored exchange rates.
“Nobody desires to hold on to something that would be 50% of its value in less than a month’s time,” Russ Dallen, managing partner of an investing firm in Miami, said while talking to CNN about the meltdown happening in Venezuela.
People have been hurriedly changing their bolivars for dollars, in wake of the fear of losing their hard earned money’s value, which in turn is one of the major factors for the country’s depleting dollar reserve. Factors like the dollar depletion, the government being forced to push cash into the country’s market since the money in circulation was not ‘enough’, or the recent increase in minimum wages to 40% have been ironically “enough” to push the faltering economy to the brink of “hyperinflation”.
When hyperinflation struck Zimbabwe in the late 1990’s, it wrecked the country, it’s economy and the people, the inflation rate mid-November 2008 being 79,600,000,000%! If one is to believe IMF’s speculations, Venezuela is running the same competition, its inflation expected to rise to 1,660% by the end of this year, and would further worsen.