The legal currency in Venezuela, the bolívar, has lost 30 % of its value so far this year, according to estimates by the independent Venezuelan Finance Observatory (OVF).

According to the independent organization, “for every 1 % the currency depreciates, prices increase by 1 %”. This is attributed by economist José Guerra, a member of the OVF, to the fact that “the Venezuelan economy is informally dollarized, such that when the exchange rate is rising, prices begin to rise.”

The specialist has pointed out that the Central Bank of Venezuela cannot effectively intervene to contain the depreciation of the national currency. “That is, there are not enough dollars to inject into the economy.”

Despite this outlook, which according to the OVF is not encouraging, President Nicolás Maduro has remained optimistic, citing an increase in oil production and declaring that the nation is open to international investment.

The agency’s projections point to a closing of 2025 at 120 bolivars per dollar. “The trend is undoubtedly toward currency depreciation,” Guerra continues. Regarding inflation, they have indicated that it could reach 150 %.

M.Pino

Source: alnavio

(Reference image: Juliana Mayo on Unsplash)

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