With the last few weeks seeing the Bolivar Fuerte (VEF/USD) parallel, or permuta, rate levelling out and trading in quite a tight band (typically between 5.3 and 5.5 to the dollar), I thought this update could take in the longer view chart. So here it is.
(click to enlarge)
Plenty of room to speculate the currency on the streets of Caracas…that must be why there are so many rich middle class that complain about a system that lets them…….hold on….something wrong there…..
Back to today, and with BCV currency reserves at U$33.644Bn and VEF liquidity (M2) at VEF227.13Bn as per the latest bank figures, this gives an exchange equilibrium theoretical of 6.75VEF for every dollar held by the BCV. Or put simply, the BCV head honchos can jawbone and bullshit all they like, cos if they don’t stop printing VEF hand over fist the parallel rate will never drop to the pie-in-the-sky 3.6/1 exchange they’re targetting.
Guarapitas served. The end.