The price of the dollar in the parallel foreign exchange market continues its upward rhythm. This Wednesday, November 30, it reached another ceiling by closing the day above 13 bolivars, which meant an increase of Bs. 4.07 since the beginning of the month. Meanwhile, the BCV exchange rate exceeded Bs. 11
It is unavoidable. The price of the dollar in Venezuela continues to rise without anyone stopping it. The strategy of the Central Bank of Venezuela (BCV) of injecting foreign currency is insufficient to stabilize the exchange market. The increase in public spending and monetary liquidity, the low availability of international reserves and mistrust in a currency like the bolivar with little purchasing power, they continue to be the factors that drive the price of the parallel exchange rate.
This Wednesday, November 30 the unofficial dollar closed at 13.05 bolivars, according to pages that publish the price of the currency, for an increase of Bs. 4.07 and 44.6% compared to the beginning of the month when it was quoted at Bs. 9.02.
To try to contain the escalation, the BCV made nine foreign exchange interventions in November, becoming the second month with more operations of this type, to add 67 in the year. In 2021 he performed 68 operations, so it is already expected that there will be a greater number by the end of 2022.
This strategy has attempted against a possible recovery of the issuing entity’s reserves, which as of November 29 showed one of their lowest amounts of the year: 9,985 million dollars.
The consulting company Síntesis Financiera indicated that for this Wednesday the 30th, the disbursement of Bs. 2,200 million corresponding to public administration payroll, which includes the payment of Christmas bonuses, was scheduled. «We assume that the BCV will increase the sale of foreign currency to mitigate the pressure of that money on the price of the dollar,” he said.
The pressure in the exchange market caused the bolivar to continue losing its purchasing power and in just one month it lost 30.8% of its value.
?️ 11/30/2022
? 1:20 PM
? Bs. 13.05
? 1.12% Bs 0.14 pic.twitter.com/oztog9OpXI– enparalelovzla (@Enparalelovzla_) November 30, 2022
On the other hand, we will have to wait for the impact of this market on the prices of goods and services in the country, which is why a jump in the inflation rate is expected in November. The consulting firm Ecoanalítica has already indicated that there is a “rebound in inflation” in Venezuela of between 5 and 6 percentage points per week.
According to the Venezuelan Finance Observatory (OVF), inflation in October was 14.5%. While the Central Bank reported that the variation closed that month at 6.2%, a percentage lower than that of September when it ended at 28.7%. Everything seems to have a double-digit inflation rate again in November.
Meanwhile, the BCV exchange rate also accompanies the parallel in this rise. In the day of this Wednesday it also reached a new ceiling, and this time it ended at Bs. 11.07.
Despite this increase in the currency traded on the exchange tables, Financial Summary highlighted that the breject between the parallel and the official dollar rose to 18.4% last Friday, November 25, which reflected a widening of three percentage points compared to the previous week. «For the second week in a row, the exchange rate gap remained above the 10% level; This is the first time this has happened this year.”
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Asdrúbal Oliveros, director-partner of Ecoanalítica, believes that The current episode of dollar growth is “more serious” than the previous ones devaluation crisis and “that is why we must be very careful and cautious”.
He explained that there are several factors that generate this impulse: the difficulties that the administration of Nicolás Maduro has to bring to the country the foreign currency in cash resulting from the sale of Venezuelan oil in the international market due to operational problems and sanctions; as well as the current coincidence between the shortage of foreign currency delivered by the BCV with the difficulties that have arisen in the world of cryptocurrencies.
«As it will be remembered, in the last year and a half, the unofficial currency market has been operating mainly through cryptocurrency gateways (a mechanism that allows bolivars to be exchanged for dollars or vice versa), and a series of difficulties have occurred in this market abroad, leaving many unofficial market operators illiquid. We are in a perfect storm.” Olivers said.
He argued that the exchange rate could be increasing since “there is a funnel in the supply of foreign currency in the face of great demand. This issue will continue to impact in the coming days.
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