The Venezuelan Bolivar had faced dreadful declines that left the currency at rock bottom for years and years. Millions of Venezuelans left the country while those who chose to stay have turned their back on the bolivar and used the dollar instead. The plunge that dragged Venezuelans to poverty was seemingly irrevocable until this year. When the Bolivar traded at a rate of nearly 4.5 to US Dollar for the past few months, the currency appears to remain relatively stable.
Why has the Bolivar been more stable this year?
The Venezuelan bolivar’s surprising turnaround may have stemmed from the socialist regime’s orthodox approach to keeping its fiscal spending manageable and setting the economy free from government controls.
The currency’s stabilization is also attributable to the country’s oil reserves. With international prices going up combined with higher domestic output, the oil industry has produced more hard currency for the country. Gold mining, along with export industries that include cocoa, rum, and shrimp farming, has brought in considerable revenues and has also enabled the central bank to meet the demand for hard currency. In 2021, the Central Bank of Venezuela has sold close to 1.5 billion USD in the foreign exchange market.
The New Venezuelan Bolivar Digital (Digitales)
In its attempt to combat hyperinflation, Venezuela has rolled out the new digital bolivar in 2021. It introduced banknotes, removing six zeros from the previous soberano bolivar notes. The obverse of the new 5, 10, and 20 digitales bolivar banknotes features Latin American Independence hero Simon Bolivar. The currency is named after him. Shown on their reverse design is the Battle of Carabobo. Led by Simon Bolivar, about 6,500 patriots confronted the Spanish royalists on June 24, 1891, at the Fields of Carabobo. It is the last and the largest fight of the Venezuelan War of Independence. It led to Venezuela’s independence from Spain and the establishment of the Republic of Gran Colombia. Also depicted on the notes’ reverse are the national emblem and the Monument to the Motherland on Carabobo plains.