Venezuela’s Currency Disaster: Bolivar So Worthless It’s Being Used As A Napkin

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Guy Bentley Research Associate, Reason Foundation
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Venezuela’s economic disaster has turned to farce with the currency now so worthless it’s being used for napkins and empanada wrappers.

The Bolivar has been heading for collapse with last officially published figures in December showing inflation running at 68.5 percent. On Monday, Reddit user Victorinox126 uploaded a picture that showed him using a 2-bolivar note instead of a napkin to hold an empanada.

Venezuela Curreny

Bolivars are still traded for dollars mostly on the black market thanks to draconian currency controls. Venezuela’s President Maduro recently allowed citizens to buy up to $300 a day, but only $200 of that sum can be held in cash.

CNN Money reports the unofficial exchange rate has soared by more than 700 percent over the past year. According, one U.S. dollar is worth a 676 bolivars. Basic goods such as cooking oil, toilet paper, and even beer are running short thanks to the severe currency controls, a host of price caps and profit ceilings.

The halving of the oil price, Venezuela’s most important commodity and export, has also hit the economy hard with less money coming into the treasury to pay for a vast array of government programs.

In October, Venezuela is due to make a $5 billion debt payment. There is a serious prospect the devastated Latin American economy will miss the payment and default on the debt.

Economic chaos is also increasingly leading to social collapse. On August 8, the Venezuelan Observatory of Social Conflict reported that 56 incidents of looting and 76 looting attempts took place in the first half of 2015. On July 31, one man was killed and 60 were arrested after supermarket raids by hungry citizens in the city of Ciudad Guayana.

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