The State of Venezuelan Bolivar and Its Future

By, 02 Oct 2017
Venezuelan Bolivar and Its Future
Venezuelan Bolivar and Its Future

As earth evolves, money does as people use it to transact with other individuals or other countries. They say, you should never fall in love or worship money, but you have to admit that you wouldn’t be living a good life or survive for years without a single cent in your pocket. And when it comes to money, terms like currency, currency converter, and exchange rates cannot be erased. They all belong to one team where each member won’t function right without the others.

Why US Currency Matters?

Among the currencies in the world, US dollar is probably the most known as it actually a vital piece in foreign exchange of currencies. For instance, why does it matter that you have to know the rate of US dollars today if you want to buy dollars from another country? How can the US dollars affect Canadian and Australian dollars, a pound, yen, or even euro? Well, if you want to visit any place that uses these currencies, you have to evaluate their prices with US dollars.

What if one unit of account of a country is stronger than another unit of account? In this case, there are different ways to deal with transactions but the most common solution is through an exchange of currency. For example, if you are going to stay in Venezuela and you’re coming from Canada, you have to buy Bs. 8.14 for each C$1 in order to buy the items you want without worrying about the currency differences.

What People Did and What is the Future of Bolivar?

The stronger a unit of account is over another unit of account, the more it can get when purchasing goods. This is very true to US dollars and Venezuelan Bolivar where $1 is equal to Bs. 10.16. Over the past few months, Venezuela’s national currency dove down by 18% against the US dollars on the black market. From the Bs. 17,981 per $1 before, its value went down real good under 60%.

This is due to the current state of Venezuela where countries from different parts of the world have advised Nicola Maduro, Venezuela's president to negate the idea of “constituent assembly”.

Bs. 20,000 notes were printed to counter-attack the world’s highest rate of inflation in Venezuela. A lot of people in Venezuela have also considered using Bitcoin as the fast-rising solution. Bitcoins became highly in demand as it can be used to buy gift cards on Amazon, donate to those in need, and purchase goods to various retailers.

Bitcoin in Venezuela

While Bitcoin was practically ignored in nations like in the US, Venezuelans found relief with it. They don’t need a physical bank account to receive and send one, the Internet connection on their mobile phones got it covered. The government doesn’t have a control over Bitcoin nor does anyone have the capacity to print it since it doesn’t have a physical form.

Venezuela BTC
Venezuela BTC

A lot of Venezuelans have desperately held onto Bitcoin to buy goods while Bolivar is technically useless. Moreover, Bitcoin is less volatile compared with Bolivar even if it experiences shifting in rate. Some companies in the country have already started accepting Bitcoin as payment to keep the business going. Hence, it was reported that transactions with LocalBitcoins per week reach about 370 Bitcoins.

Problems People Must Solve When Inflation is So High

Street protests led to 120 dead people, a deep economic recession occurred, exacerbating by food and shortage of medical needs. But these problems are just the sum of it. Generally, inflation leads to a price increase, reduced number of purchases with Venezuela Bolivar, and impulsive spending usually occurs the moment people have perceived a price hike on goods.

Due to price hike and lower value of the currency, inflation eats a lot of people’s savings in a short period of time which leads to reduced savings. The fixed bond value is also affected as its value reduces. But that’s not all; hoarding is also part of the list as people shop for essential goods while they make the most of their money’s value then stores them. Lastly, hyperventilation is the worst which Venezuela suffers from.

Top 10 Currencies Which Have Similar Situation with Venezuelan Bolivar

Aside from Venezuela’s Bolivar, other countries in other parts of the globe suffer the same inflation problem. However, Venezuela’s bolivar remains as the highest currency crisis as of 2017. Below are the top 10 currencies that suffer the same situation with Venezuela Bolivar:

  1. Angola - Kwanza
  2. Argentina - Peso
  3. Egypt - Pound
  4. Mozambique - Metical
  5. Nigeria - Naira
  6. Uzbekistan – So’m
  7. Cambodia - Riel
  8. Haiti - Gourde
  9. Ukraine - Hhryvnia
  10. Ghana – Cedi

How Badly Did Venezuela’s Bolivar Got?

Believe it or not, Venezuela’ bolivar had really gotten the worst worldwide that even the fake gold from WOW outranked its value. The value of Bolivar has really gotten under the skin of Venezuelans that even the value of gold in WOW or World of Warcraft did not go unnoticed on them. According to one Venezuelan citizen named “Keleb” on Twitter, the black market of bolivar now fell on Bs.F 8493.97 = US$1 while WOW token goes with 8385g = US$1.

WOW token
WOW token

The Prices of oil in Venezuela faced a swift fall due to inflation which caused the country to experience turmoil. Before, Bs. 100 is their highest denomination but now, its value has horribly fallen to 2 cents. Before Bs. 100 can already fill bags of groceries and now, there’s no way you can buy anything with it alone.

For instance, a pack of take-out noodle alone can cost from $3 to $30 depending on the type of currency you have an access. A night in a five-star Marriott hotel now costs $70 to $700.

While foreign visitors practically rejoice for taking advantage of “world’s cheapest country” with super cheap flights, and other transportation expenses when converted to US dollars, the country falls deeper into madness and chaos. People starve; their bank accounts slowly nearing to 0; many people still suffer from losing their loved ones, who joined the protests, and more will come.

Keep tuned in with us for more info update about Venezuelans situation with currency, currency converter, and exchange rates.

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