1.2$ minimum wage in Venezuela sounds like a joke, but is real.
- Welcome to my talk.
This is the fourth time in the history of Venezuela that the dollar reaches 100 bolivars.
We have had 4 different monetary cones that have suffered devaluation processes due to erroneous political decisions in the last decades. Those from 2014 to the present have been so serious that they have caused a complex humanitarian crisis and a migratory explosion of more than 8 million Venezuelans.
- Let's see.
- The "Bolivar" as currency existed between 1879 until it was assassinated by Hugo Chavez in 2007. The parity of that monetary cone reached 100 bolivars for each dollar in October 1993.
In 2007, when the monetary reconversion was decided, the dollar reached 5,700 Bolivars.
Then came the 2008 reconversion. Three zeros were removed from the Bolivar Bs of all times, it was divided by 1,000 and thus was born the "Bolivar fuerte".
It did not stop devaluating even when the oil barrel cost more than $100 and the country was swimming in abundance and waste.
- The "Bolivar fuerte" existed between 2008 and 2018.
When it was born, in January 2008, its first exchange rate was double. In the official market each dollar cost 2.15 BsF and in the parallel market 5.35 BsF.
That strong Bolivar became less strong and in September 2014 it was already marking 100.93 bolivars per dollar in the parallel market.
The economy was so insane that there were 4 exchange rates in 2014 with the creation of Cencoex - National Center for Foreign Trade: Official dollar, Sicad I, Sicad II (later called Simadi) and the black market dollar.
Official dollars were following the parallel dollar because the country was already in economic recession. The Sicad II reached 100 dollars in November 2014. The official dollar never went above 10 bolívares fuertes but it was not freely available, it was only assigned to those who were plugged in, and it was the one that was used in a fictitious way to say that Venezuelans had "the highest salary in the continent". Another official lie. That rate was eliminated in 2018.
The BsF. died in 2018, when the exchange rate with the dollar already reached 3,915,000 bolivars in the parallel market and 172,600 bolivars in another rate they invented and called Dicom. The prices of anything were expressed in millions and billions of bolivars.
In August 2018 the Bolivar fuerte died for a "Sicadiato" and they eliminated 5 zeros from that currency. Not 3 or 6... but 5 zeros. It had to be divided by 100,000. People got terribly entangled.
- The "Sovereign Bolivar" existed between 2018 and 2021.
When this currency was born, in August 2018, at the official rate of the Central Bank it was quoted at 61.02 sovereign bolivars per dollar, and at the parallel rate it already cost 101 sovereigns per dollar. So it was born at 100.
The official rate was artificially held back for a few months, but by November 2018 it was already over 150 sovereign bolivars per official dollar. The parallel that same November reached 495. Chavismo is a machinery for breaking other people's pockets.
Do you know how much was the inflation in 2018?
1,698,488.2% [and remember that the oil sanctions were later, in 2019].
When the "sovereign bolivar" died, sovereignly shattered and humiliated, it was September 2021 and at the official rate the dollar already cost 4,181,781 bolivars, while in the parallel market 5,035,381 sovereign bolivars were paid per dollar. Do you remember that just three years ago it cost 100? That is why it is almost impossible for Venezuelans to keep track of a murky past. In addition, each migratory wave took with it a different exchange reference.
The sovereign bolivar dies and 6 zeros are removed from the currency to start again the present cycle. It was necessary to divide by 1,000,000.
- The "Digital Bolivar" was created in 2021 and is the current monetary cone.
When this currency was born, in October 2021, the official rate was 4.39 digital bolivars per dollar and the parallel rate was 4.47. The parallel rate still exists because the exchange control has not completely died. The State centralizes the purchase and sale of foreign currency and, depending on its availability, intervenes in the official rate and alters the parallel market.
During those years, a certain stability is feigned, an attempt is made to pretend that things can improve, but at the cost of not increasing salaries, reducing the public payroll, affecting all basic services, abandoning even more the infrastructure and continuing to expel millions of migrants. The country of bubbles is created. Even so, the devaluation of the bolivar has not stopped.
It is called "digital bolivar" because in view of the existence of dollars in the market, which flow from hand to hand, the Central Bank no longer cares how many bolivar bills and coins are in circulation; it is enough for them to continue issuing bolivars and multiplying the monetary mass in digital accounts. This is how they pay payrolls and perform other non-transparent operations. Its correlation with the cash in the street becomes irrelevant after the agony of the 100 bolivar bills in 2016. Forbidden to forget that episode.
As I write this, on March 26, 2025, the parallel rate has surpassed 100 digital bolivars per dollar. It is the fourth time in history that it has happened. The official rate is still lagging at 68.69 bolivars per dollar, but it is impossible for most Venezuelans and companies in the country to access those dollars at that rate.
Therefore, it will most likely continue to rise because those responsible for the economic crisis are the same and remain in power.