Economics

What is the Currency of Venezuela?

The official currency of Venezuela is the Venezuelan bolívar.

Venezuela is a South American nation with Caracas as the capital city. The country hosts an estimated population of 31,568,179 and occupies an area of 716,445 square km. As of 2018, the GDP (PPP) of Venezuela is $373.119 billion while the per capita GDP (PPP) is $11,722. The manufacturing and petroleum sectors are the largest economic sectors of Venezuela. About 50% of the country’s GDP is derived from petroleum exports which constitute 95% of the country’s total exports. Due to its great dependence on oil, the economy of Venezuela suffered a major setback in the 1980’s when there was a global collapse of oil prices. Inflation rates in the country skyrocketed during the 1980’s and 90’s. Currently, the economy of Venezuela is facing a major crisis and is plagued with extremely high rates of inflation, widespread poverty, and unemployment rates. Due to the economic crisis, many people are emigrating to the neighboring countries or elsewhere in search of a better life.

The Currency of Venezuela

Venezuela’s currency in current use is called the Bolívar fuerte which uses the currency code VEF. This currency was introduced in the country on January 1, 2008, because of inflation. It replaced the previous currency of bolívar. However, the high inflation rates prevailing in the country has forced the Central Bank of Venezuela to introduce a further redenomination of the currency. The currency with the new denominations is set to be launched on June 4, 2018. It will be named bolívar soberano.

The Rise and Fall of the Bolívar

The name bolívar of the Venezuelan currency is derived from the name of Simon Bolívar, the famous hero of the independence movement of Latin America. An 1879 monetary law led to the adoption of the currency in Venezuela. It replaced the venezolano, the former short-lived currency. The conversion was set at one venezolano was equal to 5 bolívares. In 1934, 3.914 bolívares was equal to 1 US dollar. For a significant period of time, the Venezuelan bolívar remained one of the most stable currencies in the Latin American region. However, post-February 18, 1983, the currency lost its stability and got highly devalued, a situation that continues to plague the economy of the country to this date. Hence, this date is aptly dubbed as the Black Friday by many people in Venezuela.

Design of the Venezuelan Coins and Banknotes

As mentioned previously, the new Venezuelan currency, the bolívar soberano will be released soon. The coins will be in two denominations of 1 bolívar and 50 céntimos. Currently, the coins of Bolívar fuerte in circulation are circular in shape. The obverse side of these coins mentions the denomination. The 8 stars of the Venezuelan flag and waves symbolizing the bands of the flag are also featured on this side. The coat of arms and the name of the minting country can be seen on the reverse side. Coins of all denominations have a similar design with the exception of the 1 bolivar coin which features Simón Bolívar’s portrait in the obverse side and the coat of arms, the denomination, and an inscription on the other side.

The banknotes of the Bolívar fuerte has a portrait-oriented and a landscape-oriented obverse and reverse sides, respectively. The new currency notes of the bolívar soberano will also feature a similar design.

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