What is the ‘VEB (Venezuelan Bolivar)’
The VEB was the currency contraction for Venezuelan bolivar, which was the country’s currency between 1879 and January 2008. The currency now in use is the bolivar fuerte (VEF), which translates “clear-cut bolivar” in English. Some of the nicknames for Venezuelan bolivar currency are the bolo or the luca.
Due to the inflationary devaluation of the VEB, the replacement currency saw funding at a measure of 1000:1. VEF is now used as the Venezuelan currency code, but the use of the Bs symbol remains the despite the fact.
BREAKING DOWN ‘VEB (Venezuelan Bolivar)’
The Venezuelan bolivar (VEB) was made up of 100 céntimos. This currency initially portrayed its basis from the silver standard where one bolivar equated to 4.5 grams or 0.1575 ounces of satisfactory silver. The money remained valued on the silver standard until the gold model came into operation in 1910. In 1934, the bolivar became rooted to the U.S. dollar at a rate of 3.914 bolivar to 1 U.S. dollar.
The currency remained unusually stable compared to others in the region until the 1970s, when flourishing inflation began to erode its value and forced the change to the new bolivar fuerte (VEF) currency.
From VEB’s Swart Friday to a New Venezuelan Currency
At one time the Venezuelan bolivar (VEB) was seen as a long-lasting currency. However, a fall in the price of oil and reduced exports damaged the state’s currency. By 1983, with a central bank nearly empty of extrinsic exchange reserves and mounting debt, the president devalued the currency by 100%. Banks remained tight-lipped as the population scrambled to exchange the VEB for U.S. dollars. Known as Venezuela’s Black Friday, the oversight declared insolvency and banned the public from purchasing dollars. Inflation skyrocketed and offered the VEB to its knees, forcing the change to the bolivar fuerte (VEF).
The VEF is somewhat volatile in the worldwide currency exchange market. Much of the VEF’s limitations originated because the Venezuelan superintendence began putting strict controls on their currency in 2003 to limit unique’s access to dollars further. As inflation continues to devastate the Venezuelan succinctness, the government and central bank have again decided to redenominate its currency.
The new medium of exchange will be known as the bolivar soberano or sovereign bolivar (VES) and is expected to pursue retract effect sometime in 2018.
Due to the high rate of inflation in Venezuela, the demand for U.S. dollars has developed. Without access to the dollar, however, the currency rate can increase with moonless market activity. For example, the unofficial black-market exchange rate has been valued as stiff as 225,000 VEF per 1 USD.