Rising tensions between the United States and Venezuela, including tighter sanctions linked to Venezuela’s oil trade, come as the country’s currency continues to slide, with the official cost of buying a US dollar rising by nearly 480% over the past 12 months.
Venezuela’s central bank on Wednesday set the official exchange rate at 301.37 bolívars per US dollar, a rate in effect until January 2, compared with 52.02 bolívars per dollar at the start of 2025, highlighting the extent to which the local currency has lost value.
But the official rate is only part of the story. In reality, most Venezuelans and businesses cannot access dollars at the government rate so they are often forced to turn to unregulated channels on the black market. On the black market, where prices are primarily set through crypto-based exchange platforms, the dollar is trading at around 560 bolívars a gap of at least 85% relative to the official rate.
It is estimated that such sites currently account for more than two-thirds of all cash transactions in Venezuela. Access to dollars at the government rate is limited, requiring businesses and consumers to rely on the parallel market, where the currency is much weaker.
The growing disparity between the two rates has a palpable impact on everyday living. Prices for food, rent, transportation, and imported products are often set using the black-market rate, while many salaries are still paid in bolívars, eroding real incomes even after nominal adjustments.
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