The government of Venezuela is now focusing its action on trying to establish the bolivar as the go-to currency for purchases in the country. According to several economists, this might be a risky bet in a country that has just exited hyperinflation and still suffers high levels of inflation. However, the establishment of a 3% tax targeting expenses in foreign currency and crypto is having some effects in this regard.
It is a risky bet, with bad timing, because the recovery is very weak and the economy is still suffering from chronic inflation, not hyperinflation, but chronic inflation. It is very high to restore confidence in the currency from one day to the next.
However, the measure seems to be having a real effect on the spending patterns of Venezuelans. According to numbers presented by the bank superintendence, the use of the national fiat currency has shown a rise after the tax was presented and started being applied. Numbers show that digital transactions in local currency increased by 21%, and debit payments by 22%.
The utilization of the bolivar has been steadily climbing since 2021 when 70% of the purchases were made with dollars or Colombian pesos. Surveys from Ecoanalitica now show that the bolivar and other payment methods trump the dollar, which is now only being used in 44.7% of the commercial transactions in the country. This is due in part to the intervention of the central bank of the country to stabilize the fiat currency, whose volatility has stabilized against the dollar this year.
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