The economic situation in Venezuela continues to get complicated, despite optimistic statements about a speedy economic recovery, both official and unofficial data reflect a contrary reality for Venezuelans.
According to the latest figures from the Central Bank of Venezuela, accumulated inflation in the first four months of 2023 reached a worrying 86.7 %. These data were released after nine months of silence on the part of the official institution.
These figures coincide with the forecasts of the Venezuelan Finance Observatory (OVF), an independent entity outside the Central Bank of Venezuela. The OVF highlights a 7.6 % increase in inflation during the month of May 2023, which represents an increase of 5.1 points compared to April.
Even more shocking are the data revealed by the OVF, which indicate year-on-year inflation of 458 %. These figures are essential to understand why more and more Venezuelan citizens resort to the unofficial use of the dollar as a measure to protect their income.
Consequently, Venezuelans’ daily transactions are based on unofficial exchange rate averages, which are governed by the country’s main peer-to-peer (P2P) exchanges. However, even in this market, the local currency has suffered a sharp depreciation against the dollar during the first five months of the year.
If we compare the price of the dollar on the main exchanges supported in the country, such as AirTm, Reserve or the now defunct LocalBitcoins, the average was Bs. 18.67 on January 2, 2023. However, after five months, the Inflation affected the purchasing power of Venezuelans, which has led to an implicit devaluation of up to 48% in the main P2P exchanges, with an average of Bs. 27.79.
Due to the high demand for US dollars for common transactions in the country, such as the payment of goods and services or the acquisition of property, operations are carried out based on the daily exchange rate of the foreign currency, determined by the indicators that govern the price of any product or service in Venezuela.
K. Tovar
Source: Cointelegraph
(Reference image source: Unsplash+)
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