Worth Less

Billete_de_100_bolivaresA year ago, the 100 bolivar banknote you see here on your left – Venezuela’s highest denominated, mind you – would buy you 92.6 U.S. cents on the parallel market.

By last Wednesday, that note was worth less.

By then, it could buy you just 49 and a half U.S. cents: 46.5% fewer cents, over the space one year.

Today, that same crisp bill is worth less.

As of yesterday, someone would trade you just 37.9 U.S. cents for it.

That’s 23.5% less, in a single week. 

If that doesn’t give you a case of exchange rate vertigo, consider this: at the rate the bolivar has been losing value over the last week, by March 2016 one U.S. dollar will cost 12.4 million bolivars on the parallel market.

For the old-timers, that’s 12 millardos de los viejos.

That’s an extrapolation, not a forecast.

Still, the takeaway is clear: Venezuelans’ willingness to own bolivars appears to be eroding at an accelerating rate.

And that is…not good news.

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