Venezuelan bolívar

Venezuelan bolívar
Bolívar fuerte venezolano (Spanish)

Various Venezuelan coins
ISO 4217 code VEF
Central bank Banco Central de Venezuela
 Website www.bcv.org.ve
User(s)  Venezuela
Inflation Negative increase 720% (February 2016)[1]
Pegged with U.S. dollar = Bs.F. 10.00, 399.86[2]
(Greatly different black market rate; see article text)[3]
Subunit
 1⁄100 céntimo
Symbol Bs.F.[4] or Bs.
Nickname bolo(s), luca(s), real(es)
Plural bolívares fuertes
Coins

1c, 5c, 10c, 25c, 50c, Bs.F. 1 [4]

All coins are practically worthless by October, 2015, due to high inflation.
Banknotes Bs.F. 2; 5; 10; 20; 50; 100[4]

The bolívar fuerte (sign: Bs.F.[4] or Bs.;[5] plural: bolívares fuertes; ISO 4217 code: VEF) has been the currency of Venezuela since 1 January 2008. It is subdivided into 100 céntimos[6] and replaced the original bolívar (sign: Bs.;[4] plural: bolívares; ISO 4217 code: VEB) at the rate of Bs.F. 1 = Bs. 1,000 because of inflation.

History

Bolívar

5-venezolano coin

The bolívar was adopted by the monetary law of 1879, replacing the short-lived venezolano at a rate of five bolívares to one venezolano. Initially, the bolívar was defined on the silver standard, equal to 4.5g fine silver, following the principles of the Latin Monetary Union. The monetary law of 1887 made the gold bolívar unlimited legal tender, and the gold standard came into full operation in 1910. Venezuela went off gold in 1930, and in 1934 the bolívar exchange rate was fixed in terms of the U.S. dollar at a rate of 3.914 bolívares = 1 U.S. dollar, revalued to 3.18 bolívares = 1 U.S. dollar in 1937, a rate which lasted until 1941. Until 18 February 1983 (now called Black Friday (Viernes Negro) by many Venezuelans[7]), the bolívar had been the region's most stable and internationally accepted currency. It then fell prey to high devaluation. Exchange controls were imposed on February 5, 2003 to limit capital flight.[8] The rate was pegged to the U.S. dollar at a fixed exchange rate of 1600 VEB to the dollar.

Bolívar fuerte

Official exchange rate to 1 USD since 1995.
Blue line represents implied value of VEF compared to USD. The red line represents what the Venezuelan government officially rates the VEF.
*March/April 2013 data is missing
Sources: Banco Central de Venezuela, Dolar Paralelo, Federal Reserve Bank, International Monetary Fund.

The government announced on 7 March 2007 that the bolívar would be revalued at a ratio of 1 to 1000 on 1 January 2008 and renamed the bolívar fuerte in an effort to facilitate the ease of transaction and accounting.[9] The new name is literally translated as "strong bolívar",[10][11] but also references an old coin called the Peso fuerte worth 10 Spanish reales.[12] The name "bolívar fuerte" is used to distinguish it from the older currency that is being used along with the bolívar fuerte.[13] Some estimations suggest that the government spent more than US$320 million to introduce the new currency. It should be noted that the official exchange rate is restricted to individuals by CADIVI, which imposes an annual limit on the amount available for travel (up to $3000 annually depending on the location and duration of travel) and $400 for electronic purchases.

Since the government of Hugo Chavez established strict currency controls in 2003, there have been a series of five currency devaluations, disrupting the economy.[14] On 8 January 2010, the value was changed by the government from the fixed exchange rate of 2.15 bolívares fuertes to 2.60 bolívares for some imports (certain foods and healthcare goods) and 4.30 bolívares for other imports like cars, petrochemicals, and electronics.[15] On 4 January 2011, the fixed exchange rate became 4.30 bolívares for 1.00 USD for both sides of the economy. On 13 February 2013 the Bolivar fuerte was devalued to 6.30 bolivars per 1 USD in an attempt to counter budget deficits.[16] On 18 February 2016, President Maduro used his newly granted economic powers to devalue the official exchange rate of the Bolivar Fuerte from 6.3 Bs.F per 1 USD to 10 Bs.F per 1 USD.[17]

Currency black market

The black market value of the bolívar fuerte has been significantly lower than the fixed exchange rate. In November 2013, it was almost 10 times lower than the official fixed exchange rate of 6.3 bolívares per U.S. dollar.[18] In September 2014, the currency black market rate for the Bolivar Fuerte reached 100 VEF/USD;[19] on 25 February 2015, it went over 200 VEF/USD.[20] on 07 May, 2015, it was over 275 VEF/USD and on 22 September, 2015, it was over 730 VEF/USD.[21] Venezuela still had the highest inflation rate in the world in July 2015.[22] By 3 February 2016, this rate reached 1,000 VEF/USD.

It is illegal to publish the "parallel exchange rate" in Venezuela.[3] One company that publishes parallel exchange rates is DolarToday, which has also been critical of the Maduro government.[23]

Coins

Bolívar

In 1879, silver coins were introduced in denominations of 1⁄5, 1⁄2, 1, 2, and 5 bolívares, together with gold 20 bolívares. Gold 100 bolívares were also issued between 1886 and 1889. In 1894, silver 1⁄4 bolívar coins were introduced, followed by cupro-nickel 5 and 12½ céntimos in 1896.

In 1912, production of gold coins ceased, whilst production of the 5 bolívares ended in 1936. In 1965, nickel replaced silver in the 25 and 50 céntimos, with the same happening to the 1 and 2 bolívares in 1967. In 1971, cupro-nickel 10 céntimo coins were issued, the 12½ céntimos having last been issued in 1958. A nickel 5 bolívares was introduced in 1973. Clad steel (first copper, then nickel and cupro-nickel) was used for the 5 céntimos from 1974. Nickel clad steel was introduced for all denominations from 25 céntimos up to 5 bolívares in 1989.

In 1998, after a period of high inflation, a new coinage was introduced consisting of 10, 20, 50, 100 and 500 bolívar denominations.

The former coins were:

All the coins had the same design. On the obverse the left profile of the Libertador Simón Bolívar is depicted, along with the inscription "Bolívar Libertador" within a heptagon, symbolizing the seven stars of the flag. On the reverse the coat of arms is depicted, circled by the official name of the country, with the date and the denomination below. In 2001, the reverse design was changed, putting the denomination of the coin at the right of the shield of the coat of arms, Semi-Circled by the official name of the country and the year of its emission below.

Bolívar fuerte

Coins are in denominations of 1, 5, 10, 12 1⁄2, 25, 50 céntimos, and 1 bolívar. However, only the coins of 50 céntimos and 1 bolívar are widely used as most prices are rounded up to the next 50 céntimos. It will be noticed that there is a coin of 12 1⁄2 céntimos and a coin of 1 céntimo; but no coin of 1⁄2 céntimo. It is therefore inconvenient to give correct change for a purchase of (for example) 53 1⁄2 céntimos; this is however a largely academic "problem" as goods are priced (if they use the 1⁄2 at all) in 12 1⁄2-céntimo increments. This nevertheless still presents theoretical mathematical problems, as there is also no 2 1⁄2-céntimo coin.

Denomination Shape Composition Diameter Edge Obverse Reverse Obverse image Reverse image
1 céntimo Round Copper plated steel 15 mm Milled Denomination of the coin, the eight stars and the waves representing the patterns of the national flag Coat of Arms of Venezuela and the name of the country of emission
5 céntimos Round Copper plated steel 17 mm Smooth Denomination of the coin, the eight stars and the waves representing the patterns of the national flag Coat of Arms of Venezuela and the name of the country of emission
10 céntimos Round Nickel plated steel 18 mm Milled Denomination of the coin, the eight stars and the waves representing the patterns of the national flag Coat of Arms of Venezuela and the name of the country of emission
12 1⁄2 céntimos Round Nickel plated steel 23 mm Smooth Denomination of the coin, the eight stars of the national flag and two palm branches Coat of Arms of Venezuela and the name of the country of emission
25 céntimos Round Nickel plated steel 20 mm Smooth Denomination of the coin, the eight stars and the waves representing the patterns of the national flag Coat of Arms of Venezuela and the name of the country of emission
50 céntimos Round Nickel plated steel 22 mm Smooth and Milled Denomination of the coin, the eight stars and the waves representing the patterns of the national flag Coat of Arms of Venezuela and the name of the country of emission
Bs. 1 Round Copper-Nickel center, Brass ring 24 mm Smooth 'BCV1' Effigy of the Liberator Simón Bolívar, waves representing the patterns of the national flag Denomination of the coin, the eight stars and the waves representing the patterns of the national flag, the Coat of Arms of Venezuela and the name of the country of emission

Banknotes

Bolívar

In 1940, the Banco Central de Venezuela began issuing paper money, introducing by 1945 denominations of 10, 20, 50, 100 and 500 bolívares. 5 bolívar notes were issued between 1966 and 1974, when they were replaced by coins. In 1989, notes for 1, 2 and 5 bolívares were issued.

As inflation took hold, higher denominations of banknotes started being introduced: 1,000 bolívares in 1991, 2,000 and 5,000 bolívares in 1994, and 10,000, 20,000 and 50,000 bolívares in 1998. The first 20,000 banknotes were made in a green color similar to the one of the 2,000 banknotes, which caused confusion, and new banknotes were made in the new olive green color.

The following is a list of a former Venezuelan bolívar banknotes.

Pre-1998 series banknotes (from various series)
Image Denomination Emission Year Obverse Reverse
5 bolívares 1968 Simón Bolívar and Francisco de Miranda National Pantheon of Venezuela
10 bolívares 1968 Simón Bolívar and Mariscal Sucre Altar de la Patria, Campo de Carabobo
20 bolívares 1971 Jose Antonio Paez Altar de la Patria, Campo de Carabobo
500 bolívares 1981 Simón Bolívar A branch of orchids
1,000 bolívares 1991 Simón Bolívar Signing of the Venezuelan Declaration of Independence
2,000 bolívares 1994 Antonio José de Sucre The Battle of Junín
5,000 bolívares 1994 Simón Bolívar and his coat of arms A reproduction of the painting El 19 de Abril de 1810 by Juan Lovera
10,000 bolívares 1998
1998 Series
2,000 bolívares 1998 Andrés Bello A picture of frailejones and a view of the Pico Bolívar
5,000 bolívares 2000 Francisco de Miranda Picture of two angelfishes and a panorama of the Guri Dam.
10,000 bolívares 2000 Antonio José de Sucre A Marpesia petreus butterfly and the Supreme Tribunal of Justice
20,000 bolívares 2000 Simón Rodríguez and the Angel Falls in the background A blue-and-yellow macaw and the Angel Falls
50,000 bolívares 2005 José María Vargas Central University of Venezuela, Caracas

Bolívar fuerte

Banknotes are in denominations of 2, 5, 10, 20, 50 and 100 bolívares. High inflation caused black market rate of about US$1, to 770 Bolivar by early October, 2015.

2008 Series
Image Denomination Emission Year Obverse Reverse
2 bolívares 2008 Francisco de Miranda Orinoco River Dolphins (Inia geoffrensis) with Coro Dunes in background; Gusano flower
5 bolívares 2008 Pedro Camejo Giant armadillo (Priodontes maximus) with the plains of Los Llanos in the background
10 bolívares 2008 Cacique Guaicaipuro American harpy eagle (Harpia harpyja) with the Ucaima Falls at Canaima National Park in the background
20 bolívares 2008 Luisa Cáceres de Arismendi Hawksbill turtle (Eretmochelys imbricata) with Macanao Mountain in the background
50 bolívares 2008 Simón Rodríguez Spectacled bear (Tremarctos ornatos) with Laguna Santo Cristo at Sierra Nevada National Park in the background
100 bolívares 2008 Simón Bolívar Red siskin (Carduelis cucullata) with Cerro El Ávila at El Ávila National Park in the background
Current VEF exchange rates
From Google Finance: AUD CAD CHF EUR GBP HKD JPY USD INR
From Yahoo! Finance: AUD CAD CHF EUR GBP HKD JPY USD INR
From XE: AUD CAD CHF EUR GBP HKD JPY USD INR
From TransferWise: AUD CAD CHF EUR GBP HKD JPY USD INR
From OANDA: AUD CAD CHF EUR GBP HKD JPY USD INR
From fxtop.com: AUD CAD CHF EUR GBP HKD JPY USD INR
From Currency.Wiki: AUD CAD CHF EUR GBP HKD JPY USDINR

See also

References

  1. ↑ Vyas, Kejal (3 February 2016). "Inflation-Racked Venezuela Orders Bank Notes by the Planeload". Wall Street Journal. Retrieved 25 March 2016.
  2. ↑ Tipos de Cambio de Referencia, Banco Central de Venezuela, February 5, 2016
  3. 1 2 Simon Romero (February 9, 2008). "In Venezuela, Faith in Chávez Starts to Wane". New York Times.
  4. 1 2 3 4 5 Banco Central de Venezuela. "B.C.V. Bolívar Fuerte ." Accessed 26 Feb 2011.
  5. ↑ La idea de Bolívar El Diario, 18 Diciembre 2013
  6. ↑ "Venezuela Introduces New Currency". Gata. 2008-01-01. Retrieved 2008-02-04.
  7. ↑ The Economist
  8. ↑ CADIVI, Sistema Cambiario
  9. ↑ "Currency of Venezuela".
  10. ↑ television advertisements Bolivar Fuerte Bs.F for the new currency repeatedly use "fuerte" as meaning "strong" such as in "Una economía fuerte" (a strong economy) and "¡Aquí hay fuerza!" (There's strength in this!)
  11. ↑ Rueda, Jorge (2008-01-01). "Venezuela cuts three zeros off bolivar currency". Reuters. Retrieved 2008-02-04.
  12. ↑ Numismatic Catalog of Venezuela. "Coins in Pesos Fuerte". Retrieved 2008-02-04.
  13. ↑ "Chavez Passes Law-Decree on Monetary Reform in Venezuela".
  14. ↑ Mander, Benedict (10 February 2013). "Venezuelan devaluation sparks panic". Financial Times. Retrieved 11 February 2013.
  15. ↑ "Venezuela will slash value of currency, the bolivar". BBC. 2010-01-09. Retrieved 2010-01-09.
  16. ↑ "Chavez Devaluation Puts Venezuelans to Queue on Price Raise". Bloomberg. 11 February 2013. Retrieved 11 February 2013.
  17. ↑ Holodny, Elena (18 February 2016). "Venezuela raises gas prices 6,200%". Business Insider. Retrieved 18 February 2016.
  18. ↑ "Stuck in Venezuela with those currency exchange blues". Los Angeles Times. 12 November 2013. Retrieved 7 January 2014.
  19. ↑ "Venezuela bolivar hits record low 100/U.S. dollar on black market". Reuters. 26 September 2014. Retrieved 5 October 2014.
  20. ↑ "Venezuela’s bolívar tumbles beyond 200 mark". Financial Times. 25 February 2015. Retrieved 28 April 2015.
  21. ↑ https://dolartoday.com/
  22. ↑ Pardo, Daniel (8 July 2015). "Living with Venezuela's high inflation". BBC News (UK). Retrieved 7 August 2015.
  23. ↑ Otis, John. "Venezuela forces ISPs to police Internet". Committee to Protect Journalists. Retrieved May 15, 2015.
  24. ↑ Numismatic Catalog of Venezuela. "Coins from Venezuela : 1000 Bolívares - Design B, Type A". Retrieved 2011-01-07.

Bibliography

External links

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