Venezuela’s Plummeting Bolívar Dips into Hyperinflation

on December 2, 2014

The value of the Venezuelan bolívar has plummeted in the past month, depreciating from 102.56 to 159.02 per US dollar on the black-market exchange. November’s decline indicates that Venezuela now flirts with hyperinflation.

The rule of thumb among economists is that hyperinflation occurs when inflation — the declining purchasing power of a currency as measured by a rise in the price level — exceeds 50 percent on a monthly basis. As deduced from the black-market exchange rate and the US Consumer Price Index, Venezuela’s inflation for November reached 55.27 percent.* Even the highest denomination of the bolívar, the 100 Bs. note, is now worth a mere 62.9 US cents.

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