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Venezuela's Unofficial Exchange Rate Tumbles to 600 Bolivars Per Dollar

  • Reuters

FILE - A cashier counts bolivars at a money exchange in Caracas, Venezuela, Feb. 24, 2015.

FILE - A cashier counts bolivars at a money exchange in Caracas, Venezuela, Feb. 24, 2015.

Venezuela's bolivar tumbled to a rate of more than 600 per U.S. dollar on Thursday, less than a week after it broke 500, according to a widely used website, as the socialist-run country's currency crisis balloons.

The rate weakened to 616 bolivars per dollar, according to DolarToday, a fervently anti-government website that said the figure is based on currency trades along the Colombian border.

A severe recession and a drop in oil prices have slammed the OPEC nation's ability to provide dollars through a complex three-tiered currency control system.

The unofficial rate is now 98 times the strongest official level of 6.3 bolivars.

The 72 percent slide in the unofficial bolivar this year has shocked Venezuelans and hurt their purchasing power, which is also being squeezed by galloping inflation.

While many basic consumer goods, electricity and water are heavily subsidized or price-fixed, and fuel is the cheapest in the world, Venezuelans are hurting.

"This is horrible! Hunger Games Part 6," one user said in a frenzy of reaction on Twitter after the news.

A monthly minimum wage is now equivalent to about $12 on the unofficial exchange rate, while university-educated professionals at times earn around $40. The largest note in circulation is 100 bolivars, which would only buy one cup of coffee.

Coins Near-worthless

A meme of the DolarToday web page circulating on Internet jokes that $1 is quoting in bolivars at "Infinity and Beyond."

Coins have become near worthless, and chats among friends often revolve around startling price increases for goods such as meat or car parts, which can cost more than monthly wages.

Critics say President Nicolas Maduro has failed to take urgent measures to ease or phase out the currency controls, which have crimped imports and caused severe shortages of goods ranging from milk to medicines.

Economists warn inaction will only lead to further depreciation of the currency, deepening the recession.

Maduro says DolarToday is part of a broader right-wing campaign to sabotage his two-year government via "economic war."

He accuses the currency site, which frequently derides him, of manipulating the rate to brew social discontent.

Some economists have also expressed concerns about the site's trustworthiness, but add it is an offshoot of a structural problem rather than the root.

"The black market is not transparent and its transactions cannot be followed objectively, which it makes it highly open to manipulation," said analyst Luis Vicente Leon, adding the only way to avoid that was to open the currency market.