In the capital of Chavista Venezuela, 50% of payments for goods and services are in dollars

In the capital of Chavista Venezuela, Caracas, 50% of payments for food, medicine and services are made in dollars, according to a study by two local consultants, a phenomenon that occurs in the midst of informal dollarization.

A measurement by the firm Anova Policy and the Venezuelan Finance Observatory, carried out in 354 establishments in Caracas, revealed that in February 34.3% of purchases in supermarkets, pharmacies, hardware stores, among other businesses, have been paid with foreign currency in cash. In December of last year, those payments represented 27.5%.

The rest of the cancellations in foreign currency are made with cards or bank transfers, the study added.

More currency circulates in Venezuela since the illegitimate Chavista government of Nicolás Maduro relaxed controls on the economy in 2019 as a way to boost businesses and companies, under the economic collapse and US sanctions.

Maduro has recognized in several public speeches that the dollar works as a “scape valve”, although cancellations are still made in the local currency, the bolivar, whose value has deteriorated due to high inflation, according to the study.

This year, the Chavista regime has had as a guideline “strengthen the bolivar” after the slowdown in inflation in the last months of 2021, for which, among other measures, it has contemplated a tax on foreign currency transactions, approved by Parliament several weeks ago, but which has not yet been published in the Official Gazette .

For analysts and businessmen, this tax does not guarantee the recovery of the Venezuelan currency.

“People will want bolivars when they see that there is stability in inflation”, said the economist José Guerra, a member of the Finance Observatory. “99% of merchants think of the dollar to set prices, but regulations and the fear of fines mean that 62.7% of price setting is in bolivars. It is an incomplete dollarization”, he added.