January 18, 2021

Venezuelan inflation devours dollars and euros while striking the bolivar

Venezuelan inflation devours dollars and euros while striking the bolivar



The hyperinflationary process that Venezuela suffers, and that left almost useless the income in the local currency, the bolivar, has now begun to devour the dollars and euros that many families receive through remittances and payments for jobs in these "hard currencies", another fact that confirms the severe crisis in the country.

In the streets of the country there is talk of "inflation in dollars" and the decreasing performance of currencies to pay the average expenses of families that receive small incomes in foreign currency, as it has been for a couple of years, when $ 100 was enough to pay, at least, the basic monthly food purchase.

"Yes, I experience inflation in dollars," Venezuelan accountant José Cisneros told Efe.

The young man left Venezuela three years ago partly because of the crisis and partly to study a master's degree in business planning in Spain and, after the deepening crisis in his country, he began to send monthly shipments of 50 euros to his family, an amount that has had to raise to 70 in recent months.

Although this remittance of 70 euros represents the official exchange about 5,080 bolivares -the figure almost triples with the rate of the parallel market-, a value close to three minimum wages, the money barely enough to buy food, according to Cisneros told Efe .

The same "inflation in dollars" affected the family of the Venezuelan journalist Ramón Ballester, who now works in a hotel in the United States and went from sending his family 100 to 140 dollars per month -8,800 bolivars or almost 5 minimum wages-, a money that is only used to cover medical bills.

The deep decline of the economy in Venezuela led to an exodus estimated by the UN at around 2.3 million people, although the government of Nicolás Maduro insists on denying what some countries in the region describe as a crisis of Venezuelan migrants.

These migrants sent about 3,000 million dollars in remittances to Venezuela in 2017, according to some independent estimates, and the figure is expected to increase by the end of this year.

Although individual shipments used to be between 50 and 100 dollars per month, Venezuelan economist Jesús Casique warns that at present, at least $ 200 per person is needed to cover basic expenses, provided that the type of service is taken into account. official exchange that stands at 62.88 bolivares per US currency.

Casique told Efe that the "issuance of money without support in goods and services" as well as the "monetization of the deficit", in which the Venezuelan Government incurs, are the cause of the enormous inflation that the country suffers, and that the Parliament The estimate will close at almost 4,300,000% this year.

Inflation in Venezuela is so high that the daily rate during the past month -4% – was higher than the annual one of 2017 in Bolivia, Peru, Chile or Brazil.

"Inflation in Venezuela has fiscal reasons" linked to the economic policies of the government chaired by Nicolás Maduro since 2013, Casique added.

Meanwhile, the firm Ecoanalítica raises up to 940 dollars (just over 59,000 bolivars at the official exchange rate or almost 33 minimum wages) the income necessary to cover the expenses of an average family, which in Venezuela is understood as four members.

Experts have pointed out that Maduro's recent economic measures, which include the increase of the minimum wage by 35 times its previous value, the suppression of 5 zeros to the currency and a tax reform that affects "the richest" according to the Treasury, do not attack the root of the diseases of the economy in Venezuela.

In addition, the prices of some services in the country, such as internet, telephony or non-public education, for example, have suffered sudden increases, when before they were paid with just a handful of bolivars.

Casique estimated that the phenomenon of "inflation in dollars" will continue, because although the prices of some services have been adapted, most remain "behind" with those set internationally.

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