One Dollar Now Buys 103,000 Bolivars in Venezuela's Black Market

(Bloomberg) -- Venezuela’s currency is in free fall as hyperinflation intensifies and a recently unveiled plan to restructure foreign debt adds to a sense of chaos in Caracas.

The rate in the black market -- the place where most Venezuelans acquire dollars in the authoritarian country -- weakened to 103,000 bolivars per greenback Friday, according to dolartoday.com, a website that tracks the data. That’s a 20 percent drop just this week and compared with a rate as low as 10,000 per dollar as recently as late July. The official government-set exchange rate -- which is virtually inaccessible -- is 10 bolivars per dollar.

President Nicolas Maduro has increased government spending -- and financed it by cranking up the central bank printing presses -- to curry favor in the run-up to this year’s vote on whether to install a constituent assembly and further tighten his grip on power. He’ll face a presidential election next year as the populace suffers from an economy forecast to shrink 12 percent and inflation estimated to be running at an annualized rate of more than 4,500 percent over the past three months.

To contact the reporter on this story: Patricia Laya in Washington at playa2@bloomberg.net.

To contact the editors responsible for this story: Daniel Cancel at dcancel@bloomberg.net, Brendan Walsh, Randall Jensen

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