Venezuelan bolívar

Venezuelan bolívar
Bolívar fuerte venezolano (Spanish)

Various 2007–2015 series bolívar fuerte notes
ISO 4217
Code VEF
Denominations
Subunit
  1⁄100 céntimo
Plural bolívares fuertes
Symbol Bs.F.[1] or Bs.
Nickname bolo(s), luca(s), real(es)
Banknotes Bs.F. 2; 5; 10; 20; 50; 100; 500; 1000; 2000; 5000; 10,000; 20,000[1]
Coins Bs.F. 1, 10, 50, and 100[1]
Demographics
User(s)  Venezuela
Issuance
Central bank Banco Central de Venezuela
 Website www.bcv.org.ve
Valuation
Inflation

Negative increase 800% (2016)[2]

Money loses half its value every 46 days
Pegged with U.S. dollar = DIPRO Bs.F. 10.00, DICOM 2.161,00[3]
(Greatly different black market rate; see article text)[4]

The bolívar fuerte (sign: Bs.F.[1] 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.;[1] 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.
Note: Prior to 2007, the bolívar (VEB) was used, while this graph uses the bolívar fuerte (VEF) exchange rate. 1 VEF = 1,000 VEB.
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 refers to 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 was being used along with the bolívar fuerte.[13] The official exchange rate is restricted to individuals by CADIVI, which imposes an annual limit on the amount available for travel.

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 bolívar fuerte from 6.3 Bs.F per 1 USD to 10 Bs.F per 1 USD, which is a 37% decrease in value.[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 7 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. This rate surpassed 4,300 VEF/USD on 10 December 2016. It surpassed 10,000 on 28 July 2017, 12,000 on 1 August 2017, and 16,000 on 3 August 2017. However, by the 9th of August it had reduced to 13,000[23]

It is illegal to publish the "parallel exchange rate" in Venezuela.[4] One website that publishes parallel exchange rates, since 2010, is DolarToday, which has also been critical of the Maduro government.[24] Mercadolar is another website showing parallel exchange rates.[25]

Coins

Bolívar

Various Venezuelan coins

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  12 1⁄2 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  12 1⁄2 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 impossible to give correct change for a purchase of (for example)  53 1⁄2 céntimos. This was, however, a largely academic problem as goods were priced (if they used the  1⁄2 at all) in  12 1⁄2 céntimo increments.

In December 2016, it was announced that coins of 10, 50, and 100 bolívares would enter circulation soon.[27]

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
[28] [29] 10,000 bolívares 1998 Antonio José de Sucre
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 (different version of portrait) 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

2007–2016 ("2008")

New banknotes of the series 2007–2015 with values of 2 to 100 BsF have been issued since 20 March 2007. The greater the values, the longer re-issuing occurred. Only the 100-BsF-note had been re-issued in November 2015.

All values have the same rectangular format 156 × 69 mm, somewhat more lengthy than the earlier series.

Obverse side is oriented in portrait-style, lower halves carry a portrait.

Reverse side is landscape oriented, left two thirds show an animal in front of habitat.

The value-specific motives stay, but printing quality changes while being re-issued. Printed by Casa de la Moneda Venezuela in Venezuela.[30]

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

2016–17

High inflation, which was a part of Venezuela's Economic Collapse of 2016, caused the bolivar fuerte's value to plummet. The 2- and 5-bolívares fuertes notes were no longer found in circulation due to this inflation, but remain legal tender. By December 2016, the 100 bolívares fuertes note, Venezuela's largest denomination of currency, was only worth about $0.023 USD on the black market.[31]

On 7 December 2016, a new series of banknotes (recolors of the previous notes) in denominations of 500, 1,000, 2,000, 5,000, 10,000, and 20,000 bolívares fuertes was unveiled to the Venezuelan public.[27][31] Days later on 11 December, President Nicolás Maduro who had been ruling by decree wrote into law that the 100 Bs.F. would be pulled from circulation within 72 hours because "mafias" were allegedly storing those particular bills to drive inflation.[32] With more than 6 billion 100 Bs.F. notes issued consisting of 46% of Venezuela's issued currency, Maduro enacted an exchange for Venezuelan citizens to transfer all 100 Bs.F. notes for 100 Bs.F. coins while also blocking international travel to prevent the return of the bolívares that were supposedly stockpiled.[32][33] The government justified the move claiming that the United States was working with crime syndicates to spirit away Venezuela's paper money to warehouses in Europe to cause the fall of the government. The government was thwarting this threat by withdrawing the notes from circulation.[34] Interestingly enough, on 14 February 2017, Paraguayan authorities uncovered a 30 metric ton stash of 50 and 100 bolívares fuertes totaling 1.5 billion Bs.F on its Brazilian border that had not yet been circulated.[35] According to a United States Department of Defense adviser linked to The Pentagon, the 1.5 billion Bs.F was printed by Venezuela and destined for Bolivia, since unlike the implied exchange rate of thousands of bolívares fuertes equaling one United States dollar, the exchange rate was approximately 10 bolívares fuertes per dollar, making the value of the stash 419 times stronger from US$358,000 to US$150 million.[35] The Pentagon adviser further stated that the Venezuelan government tried to send the newly printed notes to be exchanged by the Bolivian government so Bolivia could pay 20% of its debt to Venezuela, and so Venezuela could use the US dollars for its own disposal.[35]

By February 2017, the deadline for exchanging the 100 bolívares fuertes note was delayed multiple times, later being extended to 20 September 2017.

2016 Series
Image Denomination Emission Year Obverse Reverse
500 bolívares 2016 Francisco de Miranda Orinoco River Dolphins (Inia geoffrensis) with Coro Dunes in background; Gusano flower
1,000 bolívares 2016 Pedro Camejo Giant armadillo (Priodontes maximus) with the plains of Los Llanos in the background
2,000 bolívares 2016 Cacique Guaicaipuro American harpy eagle (Harpia harpyja) with the Ucaima Falls at Canaima National Park in the background
5,000 bolívares 2016 Luisa Cáceres de Arismendi Hawksbill turtle (Eretmochelys imbricata) with Macanao Mountain in the background
10,000 bolívares 2016 Simón Rodríguez Spectacled bear (Tremarctos ornatos) with Laguna Santo Cristo at Sierra Nevada National Park in the background
20,000 bolívares 2016 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 OANDA: AUD CAD CHF EUR GBP HKD JPY USD INR
From fxtop.com: AUD CAD CHF EUR GBP HKD JPY USD INR

See also

References

  1. 1 2 3 4 5 Banco Central de Venezuela. "B.C.V. Bolívar Fuerte." Accessed 26 Feb 2011.
  2. ↑ Vyas, Kejal (3 February 2016). "Inflation-Racked Venezuela Orders Bank Notes by the Planeload". Wall Street Journal. Retrieved 25 March 2016. (Subscription required (help)).
  3. ↑ Tipos de Cambio de Referencia, Banco Central de Venezuela, February 5, 2016
  4. 1 2 Simon Romero (February 9, 2008). "In Venezuela, Faith in Chávez Starts to Wane". New York Times.
  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 weakening of the "strong bolívar"". The Economist. 2010-01-14. Retrieved 2016-12-10.
  8. ↑
  9. ↑ "Currency of Venezuela – Venezuela's new currency the Venezuelan Bolívar fuerte". Republica-de-venezuela.com. Retrieved 2016-12-10.
  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". venezuelanalysis.com. Retrieved 2016-12-10.
  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. ↑ "El precio 'REAL' del Dolar paralelo en Venezuela @DolarToday.com". 15 February 2013.
  22. ↑ Pardo, Daniel (8 July 2015). "Living with Venezuela's high inflation". BBC News. UK. Retrieved 7 August 2015.
  23. ↑ "Indicadores Economía Venezolana". dolartoday.com (in Spanish).
  24. ↑ Otis, John. "Venezuela forces ISPs to police Internet". Committee to Protect Journalists. Retrieved May 15, 2015.
  25. ↑ "Su intermediario de confianza". mercaDolar.com. Retrieved 2016-12-10.
  26. ↑ "Coins from Venezuela : 1000 Bolívares – Design B, Type A : Numismatic Catalog of Venezuela". Numismatica-venezuela.info. 2016-12-04. Retrieved 2016-12-10.
  27. 1 2
  28. ↑ "Wayback Machine". 21 June 2007.
  29. ↑ "Wayback Machine". 21 June 2007.
  30. ↑ banknotes > Venezuela > series 2007–2015 colnect.com, retrieved 12 December 2016. – Specific (re-)issuing date above pair of signatures above portrait.
  31. 1 2 "Venezuela's new banknotes". Deutsche Welle. 8 December 2016. Retrieved 9 December 2016.
  32. 1 2 "Venezuela's Maduro orders 100-unit banknotes out of circulation". AFP. 11 December 2016. Retrieved 12 December 2016.
  33. ↑ "Venezuela pulls most common banknote from circulation to 'beat mafia'". The Guardian. 11 December 2016. Retrieved 12 December 2016.
  34. ↑ "Declaring war on common sense, Venezuela bans its own money". Washington Post. Dec 15, 2016.
  35. 1 2 3 Coutinho, Leonardo (23 February 2017). "Veja: Venezuela y Bolivia son sospechosas de esquema estatal de lavado". Eju TV (in Spanish). Retrieved 24 February 2017.

Bibliography

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