Though Venezuela’s official inflation rate is at 68.5%, Steve Hanke, who leads the “Troubled Currencies Project” in conjunction with the Cato Institute and John Hopkins University, believes the country’s inflation is closer to 808% in reality. With a soaring inflation rate, basic goods such as napkins are a rare commodity. The Brookings Institution explains the problem can also be attributed to the fact that 70% of consumer goods are imported to Venezuela.
According to dolartoday.com, which tracks the unofficial rate, one American dollar can be exchanged for 676.88 bolivars. The $2 bolivar note is valued at less than a third of a cent in the U.S.
The value of the bolivar note is plunging so fast that, as recently as May of this year, a person could exchange less than 300 bolivars for a dollar. Today, that individual needs more than double to buy the same dollar.
Plunging prices in oil are among the reasons to blame for the country’s woes. Venezuela is a big exporter of oil, which is why earlier this year officials from Tobago and Trinidad allegedly offered to exchange tissue paper for oil.
Venezuela is considered to have one of the riskiest sovereign debts in the world. With the economy in a state of disrepair and social order crumbling, Venezuelan President Nicolas Maduro is blaming others, including the U.S. government, for the country’s troubles.