VEB – Venezuela Bolivar
Venezuela Bolivar Fuerte is the national and legal tender of the South American nation of Venezuela and is not used anywhere else in the world. It is an extremely young currency and this is due to the fact that it did not come into legal existence until 2008 as part of a nationwide and concerted attempt by the Venezuelan government to modernize the nation’s currency as well as to reduce the debt and inflation.
The currency that preceded the Venezuela Bolivar Fuerte was the Venezuelan Bolivar which had become something of a national embarrassment due to the astronomically high levels of inflation which it was saddled with.
The Bolivar was originally created in latter part of the 19th century, in 1879 and it was itself introduced to replace and supersede another highly controversial “venezolano” coinage system which even back then, was widely regarded as entirely defunct, utterly ineffectual and the hallmark of a backward country.
Since its birthdate in 1879, the Venezuela Bolivar was originally met with much public support and approval and it was lauded by both national and international economists as the epitome of a genuinely stable and robust currency. Indeed, so impressive was the initial reign of the Venezuela Bolivar that it was even cited by other Latin American countries that were eager to follow in the footsteps of Venezuela.
However, the Venezuela Bolivar and its continued economic and commercial success finally came to a sudden and swift end in 1983 where it fell prey to the ravages of currency speculation and foreign exchange rates across the globe.
It is crucial to appreciate that the Venezuela Bolivar Fuerte is merely intended as a temporary name to differentiate between the old and new version of the currency, and it would seem that if the publications and fiscal literature published by the Venezuelan government, then the Venezuela Bolivar Fuerte is merely the old currency which has underwent revaluation.
However, the Venezuela Bolivar Fuerte has not been met with universal applause or support, and indeed, one of the most common criticisms directed towards it has been the fact that the black market has enjoyed a brisk and highly lucrative trade in conducting their own illegitimate exchange policy.
Another major bone of contention for the public at large is the fact that the government has spent a record level of money trying to ensure that the currency is actually advertised, produced and circulated in a fair and efficient manner. Conservative estimates place the total level of expenditure to date at US$320,000,000.
January 2010 has been an happy time for the Venezuela Bolivar and the reason for this was due to the fact that the value of the currency was artificially capped at the rate of 2.60 bolívares to the dollar which has been one of the strongest performing periods for the currency. This is a direct consequence of a trade and currency trading agreement that has been ratified between the Venezuelan and US Governments at the highest levels of power.
However, the fixed term agreement has not always worked in the best interests of the Venezuela Bolivar and this was plainly evidenced in 1934 when the value of the currency was set at 3.914 bolívares = 1 U.S. dollar.
Given the significant amount of opposition to the Venezuela Bolivar Fuerte campaign of introduction and circulation into the economy at large, as well as the significant opportunities for money laundering that have resulted as a consequence, it is difficult to predict whether the Venezuela Bolivar Fuerte is here to stay.
Only time, as well as hindsight, will be able to inform us as to this.
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