Venezuelan bolívar

Venezuelan bolívar
Bolívar fuerte venezolano (Spanish)
Various bolivar fuerte notes.
ISO 4217
Code	VEF
Denominations
Subunit
1⁄100	céntimo
Plural	bolívares fuertes
Symbol	Bs.F.[1] or Bs.
Nickname	bolo(s), luca(s), real(es)
Banknotes	Bs.F. 2; 5; 10; 20; 50; 100[1]
Coins	1c, 5c, 10c, 25c, 50c, Bs.F. 1 [1]
Demographics
User(s)	Venezuela
Issuance
Central bank	Banco Central de Venezuela
Website	www.bcv.org.ve
Valuation
Inflation	720% (February 2016)[2]
Pegged with	U.S. dollar = Bs.F. 10.00, 399.86[3] (Greatly different black market rate; see article text)[4]

The bolívar "fuerte" (sign: Bs.F.^[1] or Bs.;^[5] plural: bolívares "fuertes"; ISO 4217 code: VEF) has been the currency of Venezuela since 1 January 2008. It is subdivided into 100 céntimos^[6] and replaced the original bolívar (sign: Bs.;^[1] plural: bolívares; ISO 4217 code: VEB) at the rate of Bs.F. 1 = Bs. 1,000 because of inflation.

History

Bolívar

5-venezolano coin

The bolívar was adopted by the monetary law of 1879, replacing the short-lived venezolano at a rate of five bolívares to one venezolano. Initially, the bolívar was defined on the silver standard, equal to 4.5g fine silver, following the principles of the Latin Monetary Union. The monetary law of 1887 made the gold bolívar unlimited legal tender, and the gold standard came into full operation in 1910. Venezuela went off gold in 1930, and in 1934 the bolívar exchange rate was fixed in terms of the U.S. dollar at a rate of 3.914 bolívares = 1 U.S. dollar, revalued to 3.18 bolívares = 1 U.S. dollar in 1937, a rate which lasted until 1941. Until 18 February 1983 (now called Black Friday (Viernes Negro) by many Venezuelans^[7]), the bolívar had been the region's most stable and internationally accepted currency. It then fell prey to high devaluation. Exchange controls were imposed on February 5, 2003 to limit capital flight.^[8] The rate was pegged to the U.S. dollar at a fixed exchange rate of 1600 VEB to the dollar.

Bolívar fuerte

Official exchange rate to 1 USD since 1995.

Blue line represents implied value of VEF compared to USD. The red line represents what the Venezuelan government officially rates the VEF.
*March/April 2013 data is missing
Sources: Banco Central de Venezuela, Dolar Paralelo, Federal Reserve Bank, International Monetary Fund.

The government announced on 7 March 2007 that the bolívar would be revalued at a ratio of 1 to 1000 on 1 January 2008 and renamed the bolívar fuerte in an effort to facilitate the ease of transaction and accounting.^[9] The new name is literally translated as "strong bolívar",^[10][11] but also refers to an old coin called the peso fuerte worth 10 Spanish reales.^[12] The name "bolívar fuerte" is used to distinguish it from the older currency that is being used along with the bolívar fuerte.^[13] Some estimations suggest that the government spent more than US$320 million to introduce the new currency. It should be noted that the official exchange rate is restricted to individuals by CADIVI, which imposes an annual limit on the amount available for travel (up to $3000 annually depending on the location and duration of travel) and $400 for electronic purchases. This codition has changed as May 9, 2016, when the Government restricts the amount of dollars for traveling purposes between $500 and $900. The amount of money restricted for electronic purchase has been suppressed, first because of a restriction to adhere it to public banking, later because of the lack of approbation from governmental sources.

Since the government of Hugo Chavez established strict currency controls in 2003, there have been a series of five currency devaluations, disrupting the economy.^[14] On 8 January 2010, the value was changed by the government from the fixed exchange rate of 2.15 bolívares fuertes to 2.60 bolívares for some imports (certain foods and healthcare goods) and 4.30 bolívares for other imports like cars, petrochemicals, and electronics.^[15] On 4 January 2011, the fixed exchange rate became 4.30 bolívares for 1.00 USD for both sides of the economy. On 13 February 2013 the Bolivar fuerte was devalued to 6.30 bolivars per 1 USD in an attempt to counter budget deficits.^[16] On 18 February 2016, President Maduro used his newly granted economic powers to devalue the official exchange rate of the Bolivar Fuerte from 6.3 Bs.F per 1 USD to 10 Bs.F per 1 USD.^[17]

Currency black market

The black market value of the bolívar fuerte has been significantly lower than the fixed exchange rate. In November 2013, it was almost 10 times lower than the official fixed exchange rate of 6.3 bolívares per U.S. dollar.^[18] In September 2014, the currency black market rate for the Bolivar Fuerte reached 100 VEF/USD;^[19] on 25 February 2015, it went over 200 VEF/USD.^[20] on 7 May 2015, it was over 275 VEF/USD and on 22 September 2015, it was over 730 VEF/USD.^[21] Venezuela still had the highest inflation rate in the world in July 2015.^[22] By 3 February 2016, this rate reached 1,000 VEF/USD. This rate was surpassed 4,500 VEF/USD on 1 December 2016.

It is illegal to publish the "parallel exchange rate" in Venezuela.^[4] One company that publishes parallel exchange rates is DolarToday, which has also been critical of the Maduro government.^[23] Mercadolar is another website showing parallel exchange rates.^[24]

Coins

Bolívar

Various Venezuelan coins.

In 1879, silver coins were introduced in denominations of  ¹⁄₅, ½, 1, 2, and 5 bolívares, together with gold 20 bolívares. Gold 100 bolívares were also issued between 1886 and 1889. In 1894, silver  ¹⁄₄ bolívar coins were introduced, followed by cupro-nickel 5 and 12½ céntimos in 1896.

In 1912, production of gold coins ceased, whilst production of the 5 bolívares ended in 1936. In 1965, nickel replaced silver in the 25 and 50 céntimos, with the same happening to the 1 and 2 bolívares in 1967. In 1971, cupro-nickel 10 céntimo coins were issued, the 12½ céntimos having last been issued in 1958. A nickel 5 bolívares was introduced in 1973. Clad steel (first copper, then nickel and cupro-nickel) was used for the 5 céntimos from 1974. Nickel clad steel was introduced for all denominations from 25 céntimos up to 5 bolívares in 1989.

In 1998, after a period of high inflation, a new coinage was introduced consisting of 10, 20, 50, 100 and 500 bolívar denominations.

The former coins were:

• 10 bolívares
• 20 bolívares
• 50 bolívares
• 100 bolívares
• 500 bolívares
• 1000 bolívares (minted 2005, issued late 2006, incorrectly rumored as recalled due to official Coat of Arms change during the interval)^[25]

All the coins had the same design. On the obverse the left profile of the Libertador Simón Bolívar is depicted, along with the inscription "Bolívar Libertador" within a heptagon, symbolizing the seven stars of the flag. On the reverse the coat of arms is depicted, circled by the official name of the country, with the date and the denomination below. In 2001, the reverse design was changed, putting the denomination of the coin at the right of the shield of the coat of arms, Semi-Circled by the official name of the country and the year of its emission below.

Bolívar fuerte

Coins are in denominations of 1, 5, 10, 12½, 25, 50 céntimos, and 1 bolívar. However, only the coins of 50 céntimos and 1 bolívar are widely used as most prices are rounded up to the next 50 céntimos. It will be noticed that there is a coin of 12½ céntimos and a coin of 1 céntimo, but no coin of ½ céntimo. It is therefore inconvenient to give correct change for a purchase of (for example) 53½ céntimos. This was, however, a largely academic problem as goods were priced (if they used the ½ at all) in 12½ céntimo increments.

Denomination	Shape	Composition	Diameter	Edge	Obverse	Reverse	Obverse image	Reverse image
1 céntimo	Round	Copper-plated steel	15 mm	Milled	Denomination of the coin, the eight stars and the waves representing the patterns of the national flag	Coat of Arms of Venezuela and the name of the country of emission
5 céntimos	Round	Copper-plated steel	17 mm	Smooth	Denomination of the coin, the eight stars and the waves representing the patterns of the national flag	Coat of Arms of Venezuela and the name of the country of emission
10 céntimos	Round	Nickel-plated steel	18 mm	Milled	Denomination of the coin, the eight stars and the waves representing the patterns of the national flag	Coat of Arms of Venezuela and the name of the country of emission
12½ céntimos	Round	Nickel-plated steel	23 mm	Smooth	Denomination of the coin, the eight stars of the national flag and two palm branches	Coat of Arms of Venezuela and the name of the country of emission
25 céntimos	Round	Nickel-plated steel	20 mm	Smooth	Denomination of the coin, the eight stars and the waves representing the patterns of the national flag	Coat of Arms of Venezuela and the name of the country of emission
50 céntimos	Round	Nickel-plated steel	22 mm	Smooth and Milled	Denomination of the coin, the eight stars and the waves representing the patterns of the national flag	Coat of Arms of Venezuela and the name of the country of emission
Bs. 1	Round	Copper-Nickel center, Brass ring	24 mm	Smooth 'BCV1'	Effigy of the Liberator Simón Bolívar, waves representing the patterns of the national flag	Denomination of the coin, the eight stars and the waves representing the patterns of the national flag, the Coat of Arms of Venezuela and the name of the country of emission

Banknotes

Bolívar

In 1940, the Banco Central de Venezuela began issuing paper money, introducing by 1945 denominations of 10, 20, 50, 100 and 500 bolívares. 5 bolívar notes were issued between 1966 and 1974, when they were replaced by coins. In 1989, notes for 1, 2 and 5 bolívares were issued.

As inflation took hold, higher denominations of banknotes started being introduced: 1,000 bolívares in 1991, 2,000 and 5,000 bolívares in 1994, and 10,000, 20,000 and 50,000 bolívares in 1998. The first 20,000 banknotes were made in a green color similar to the one of the 2,000 banknotes, which caused confusion, and new banknotes were made in the new olive green color.

The following is a list of a former Venezuelan bolívar banknotes.

Pre-1998 series banknotes (from various series)
Image		Denomination	Emission Year	Obverse	Reverse
		5 bolívares	1968	Simón Bolívar and Francisco de Miranda	National Pantheon of Venezuela
		10 bolívares	1968	Simón Bolívar and Mariscal Sucre	Altar de la Patria, Campo de Carabobo
		20 bolívares	1971	Jose Antonio Paez	Altar de la Patria, Campo de Carabobo
		500 bolívares	1981	Simón Bolívar	A branch of orchids
		1,000 bolívares	1991	Simón Bolívar	Signing of the Venezuelan Declaration of Independence
		2,000 bolívares	1994	Antonio José de Sucre	The Battle of Junín
		5,000 bolívares	1994	Simón Bolívar and his coat of arms	A reproduction of the painting El 19 de Abril de 1810 by Juan Lovera
		10,000 bolívares	1998
1998 Series
		2,000 bolívares	1998	Andrés Bello	A picture of frailejones and a view of the Pico Bolívar
		5,000 bolívares	2000	Francisco de Miranda	Picture of two angelfishes and a panorama of the Guri Dam.
		10,000 bolívares	2000	Antonio José de Sucre	A Marpesia petreus butterfly and the Supreme Tribunal of Justice
		20,000 bolívares	2000	Simón Rodríguez and the Angel Falls in the background	A blue-and-yellow macaw and the Angel Falls
		50,000 bolívares	2005	José María Vargas	Central University of Venezuela, Caracas

Bolívar fuerte

Banknotes are in denominations of 10, 20, 50 and 100 bolívares. High inflation caused black market rate of about US$1, to 770 Bolivar by early October, 2015. The 2 and 5 bolívares notes are no longer found in circulation due to inflation, but remain legal tender. Update: As of November 25th, 2016, DolarToday quotes a black market rate of 2,972 Bolivares to $1 US Dollar up from 1,215 early in September, 2016.

See also

• Economy of Venezuela
• SUCRE (currency)

References

Bibliography

External links

• Current Legal Banknotes Venezuela
• Numismatic Catalog of Venezuela
• History of Venezuelan Currency (Spanish)

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