Recently, Bolivar, the currency of Venezuela, had the prefix "fuerte", which means strong. This name implied the stability of the monetary unit, and a whole century was justified. Now the Venezuelan currency is among the leaders in the rate of devaluation.
Origin of the modern Venezuelan monetary unit (Bolivar)
The currency that preceded the Bolivars, Venezolano, was supplanted by new signs in 1879. The name was given in honor of the leader of the movement for freedom of the country from Spain - Simon Bolivar, who became the main character of Venezuela.
The first Bolivars were introduced back in March 1871, but for the next eight years the two currencies coexisted as full money. Initially, the ratio of bolivar to venesolano was 1 to 20, in the spring of 1879 there remained a single (bolivar) currency. The exchange rate for new banknotes was already 1 to 5 (for each venesolano 5 bolivars were given).
Link Venezuelan currency to other units
At the time of its appearance, bolivar was tied to the “silver standard” of the Latin American monetary union. This meant that the monetary unit was equal to 4.5 g of silver or 0.29 g of gold. In addition to the bimetallic standard, inflation protection was provided by a formula according to which the issue of new banknotes depended on the country's population.
Over time, paper notes gained popularity, nullifying the attachment to silver. In 1887, it was decided to fix the bolivar in relation to gold. A new anchor appeared in 1934, after the final crowding out of all financial competitors by the United States of America. Then most countries have pegged to the US dollar, and the Venezuelan (Bolivar) currency has not become an exception. The exchange rate against the dollar was 3.91 to 1, in 1937 it was changed to 3.18 to 1 and remained at that level until 1983. All this time, the monetary unit of Venezuela was considered one of the most stable not only in Latin America, but also in the whole world.
It is also worth noting that the Venezuelan economy is significantly dependent on world oil prices, as the country is one of the largest suppliers of raw materials.
From stability to fall
Day February 18, 1983 became known in Venezuela as "Black Friday". It was then that the Bolivar collapsed, displacing it from a leading position in terms of stability. The devaluation continued, banknotes were overgrown with zeros, depreciating bolivar more and more.
The currency reached the point of exchange of 2150 bolivars for $ 1 in early spring 2005. Two years later, a decision was made on denomination, and from the first day of 2008, residents exchanged the money they had left for new signs in the ratio of 1000 to 1.
Strong currency for a strong country
That’s what the 2008 reform slogans sounded like when they tried to save the economy by introducing a new “strong” bolivar. At the same time, a new designation was adopted in the international list of currencies: VEF (short for "Venezuelan strong bolivar"). Currency was issued in the form of notes and coins: in 1 bolivar 100 centimo. Some suggest that the new name has a connection with the peso fuerte - coins that were in use in ancient times.
After updating the currency, it regained stability in relation to the monetary units of other countries. True, most of the stability is only visible, since the official and “black” Bolivar courses are significantly different. For example, at the beginning of 2008, the official rate was 2.15 bolivars per 1 dollar, and on the black market it was changed at 5.2 to 1. The authorities are struggling to split the market, even mentioning the second rate is forbidden, and exchanging for it punishable.
Venezuelan strong (Fuerte Bolivar) currency: exchange rate against the ruble, dollar and euro
The last significant depreciation occurred in mid-February 2016, when by the decree of President Nicolas Maduro , a devaluation of 59% was carried out. After it, the official rate of the bolivar against the dollar changed from 6.3 to 10.
The data below is current as of the end of April 2016.
1 USD = 9.95 VEF (1 Venezuelan bolivar is given for 0.10 American dollars).
1 EUR = 11.17 VEF (1 Venezuelan bolivar is given for 0.09 euros).
1 GBP = 14.36 VEF (1 Venezuelan bolivar is given for 0.07 pounds).
1 RUB = 0.15 VEF (1 Venezuelan bolivar is given for 6.72 rubles).
1 UAH = 0.39 VEF (1 Venezuelan bolivar is given for 2.55 hryvnia).
Although the currency is called "strong bolivar", after the withdrawal of previous bills, the prefix "fuerte" is found less and less. In colloquial speech, local residents almost always use the short name - bolivar.
Original currency: face value and external features
Bolivar stands out significantly from the familiar dollars and euros. First of all, the design of banknotes is striking, the front side of which is made vertically, and the reverse side is horizontal. Venezuelan politicians adorn the front of the banknote, and the birds and animals that inhabit the country are depicted in the back.
Banknotes are issued in denominations of 2, 5, 10, 20, 50 and 100 bolivars, as well as coins of denomination 1 bolivar and 1, 5, 10, 12 ½, 25 and 50 centimos. 12 ½ centimo can also be called a feature of the Venezuelan currency. On one side, the face value, eight stars and the name of the monetary unit are depicted centimo, and the coat of arms and the date of issue are minted on the second. 1 bolivar is slightly different: the coat of arms is placed on one side with the face value, stars and year of manufacture, and on the reverse side the portrait of Simon Bolivar is symbolically depicted.
Where to change money, what currency to take to Venezuela
Given that the Bolivar exchange rate continues to be tied to the US dollar, it is best to take American currency on a trip. Recall that in the country there are two courses: at official points where currency exchange is allowed, Bolivar will be sold at the corresponding rate set by the Central Bank of Venezuela by order of the government. This is true for banks, exchange points, hotels, shops, travel and transport agencies.
Exchange of money with hands at the rate of the black market threatens with many troubles, as it is forbidden, and many crooks have changed among them. A good alternative is to pay with dollars in the markets and in some private institutions. Taxi drivers and guides quite willingly change their dollars, offering a rate one and a half to two times higher than a bank.
Bank cards are doubly unprofitable: firstly, when they pay or withdraw cash, the national bank rate is applied, and secondly, they also charge a commission of up to 10% of the amount used.