Venezuela’s Currency Is Doing Even Worse Than Previously ThoughtBy
New platforms for tracking rate show prices about 30% weaker
Independent forex websites are widely followed by Venezuelans
Venezuela’s currency is worth even less than previously believed, with new trackers of the black-market rate showing deep discounts compared with the long-standing benchmark gauge.
Rates from the widely watched Dolartoday.com, known for arousing President Nicolas Maduro’s ire on state TV, have lagged behind other markers that show prices about 30 percent weaker. While the U.S.-based website posts a rate of 251,000 bolivars per dollar, DolarPro has it at 362,000 and e-wallet AirTM is selling dollars for 313,000 bolivars each.
“It’s about confidence, and Venezuelans feel that their dollars are worth more than DolarToday rates,” said Henkel Garcia, the director of the Caracas consultancy Econometrica. “In a market lacking information, new indicators will appear, and consumers will ultimately determine their sell price.”
With Venezuelans having limited access to official exchange markets, they’re reliant on websites that track the rate and small exchange platforms to get a sense of what their money is worth. As DolarToday falls out of favor, dollar auctions on Whatsapp groups, sites that host virtual wallets and cryptocurrency exchanges are seen as a better marker of true value. Amid skyrocketing inflation and a massive depreciation of the Venezuelan currency, even local businesses often demand foreign currency for nearly everything they offer.
Any way you count it, the bolivar is worth massively less than just five years ago. The current DolarToday rate has it down 99.99 percent in that time span. Meanwhile inflation in the country has been running at an annual rate of 6,147 percent.
Officials at DolarToday didn’t immediately respond to emails requesting information about how it calculates exchange rates and why it differs significantly from its competitors.
Maduro has long accused DolarToday of publishing artificially weak rates to stoke unrest and undermine his socialist administration. The Venezuelan government unsuccessfully sued the website in 2015 for falsifying exchange rates. More recently, Maduro announced the country’s Petro cryptocurrency would be sold through central bank foreign-currency auctions, to mark “the burial” of various black-market rate tracking platforms.
The same hyperinflation that led low-denomination bills to double as confetti at baseball games and crash deli scales pushed Venezuela to announce it would cut three zeroes off its currency starting June 4. The official rate is currently 49,478 bolivars per dollar.
“The proliferation of these sites will continue as long as the government doesn’t change its economic policy and make economic information more transparent,” said Juan Ignacio Guarino, president of Interbono exchange house, a Caracas-based brokerage.