Updated 01:43 AM EST, Sun, Nov 29, 2020

Venezuela Note at Risk of Inflation: Country Imports Bolivar by the Planeload as Money Crashes in Black Markets

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Venezuela is in the middle of what is now known as the fastest inflation in the world. The value of their money is fast dwindling to about 6.3, 13.5, and about 200 bolivars per dollar.

At least, that 's what the government maintains officially. In truth, the situation is much more dire, with the country's largest note of 100 bolivars now worth less than 10 US cents, putting the exchange rate at around 1,003 bolivars per dollar. This means that the currency lost about 81 percent of its value in a year.

This did not happen overnight. According to Bloomberg Business, the collapse of the bolivar is due to the "government's constant printing of money despite the slump in oil prices, which in turn means that Venezuela is running out of dollars." As BBC noted in December, the inflation rate has become so high that there aren't enough bills in circulation in the Latin American country. This causes them to print more to keep up with the  needs of their population.

The amount of cash has already doubled from last year, and increases the threat of hyperinflation. If this keeps up, the country may face a massive shortfall in its dollar income -- to the tune of $38 billion.

To add to the economic woes, the government is not in its best form either, as President Nicolas Maduro is spiralling down in many opinion polls. The economic downturn is also giving a bad feedback on his rule.

The Independent UK noted that the question remaining is whether the government or economy will completely collapse first. As observed in previous years, incumbent officials suffer in the polls when their economy shrinks.

In Venezuela's case, shrinking 10 percent one year, and another six percent the next, does not do well with citizens, not to mention the fact that the inflation exploded to 720 percent.

Problems in Venezuela have become so big that there's a possibility that it could take Maduro off office. Reuters reported in January that there is a possibility that Maduro could be replaced this year. Henry Ramos of the National Assembly said in an interview, "In this situation I don't think he'll finish (his term). The crisis is swallowing him up."

Bloomberg noted that Marudo's declaration of the country's need to re-engineer their currency system came without specifics, which lead people to think that the economy will not improve any time soon. Siobhan Morden of the Nomura Holdings said, "It's not going to improve. This is just the beginning. The question is will this economic stress cause change."

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