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On March 27, 2025, Venezuela’s Central Bank (BCV) set the official exchange rate at 69.01 bolivares per dollar. However, this remains at least 53.76% lower than the parallel market, where the dollar is trading between 105.76 and 106.94 bolivares, depending on the source. This widening exchange gap highlights ongoing volatility. Analysts said a rising demand for dollars is fueled by a lack of confidence in the bolivar and the absence of effective measures to stabilize the currency.
Economist and former lawmaker José Guerra said to El Diario that the bolivar’s depreciation has accelerated since September 2024, as Venezuelans rush to convert their bolivares into dollars to shield themselves from inflation and declining purchasing power. This surge in demand for foreign currency is pushing the exchange rate higher.
Against this backdrop, El Diario examined the key factors driving the dollar’s rise in Venezuela, particularly the impact of the unofficial exchange rate, which not only influences prices but also distorts the broader economy.
1. 50% Drop in BCV Dollar Flow
Asdrúbal Oliveros, director of Ecoanalítica, said the constant rise of the dollar in Venezuela is driven by various factors, one of which is the reduction in foreign currency injections from the BCV in an effort to close the exchange rate gap. On March 5, the BCV sold $50 million to the national banking system, $10 million less than the previous intervention on February 24. This reduction signals a cutback in the funds allocated to stabilize the exchange rate.
“The key factor in this situation is the 50% drop in dollar liquidity flow from the government to the private sector through bank intervention and auctions,” Oliveros said in a video posted to his social media.
This decline in dollar supply highlights a dynamic in which the scarcity of foreign currency in the official market further drives up demand for dollars in the parallel market, worsening the gap between the two exchange rates.
2. Impact of Chevron on the Venezuelan Economy
The uncertainty caused by the U.S. government’s intention to require Chevron to halt its operations in Venezuela could impact the foreign currency supply. Financial sources said that, once the operating license is revoked—currently extended until May 27—the Venezuelan government may have measures in place to address the potential impact. However, the situation remains uncertain and complex.
Economist José Guerra said to El Diario that without the dollar injections from the BCV and the revenues from Chevron, the expectation is for further depreciation of the bolivar, which could accelerate inflation. He added that as long as the demand for dollars remains high and reserves are insufficient, the bolivar will continue to lose value against the U.S. dollar.
On the other hand, economists have expressed concerns about the potential imposition of secondary tariffs of up to 25% on countries that trade Venezuelan oil and gas. They warned that this measure would negatively affect oil exports, one of the country’s main sources of foreign currency income.
3. Lack of Dollar Supply in the Official Market
Economists said that both businesses and individuals in Venezuela have started turning to the secondary (parallel) market to obtain dollars, as the supply in the official market is insufficient. An example of this distortion can be seen when someone tries to buy foreign currency at their bank through official channels. In many cases, they are unable to do so due to the scarcity of dollars.
This situation forces citizens to seek alternatives in the parallel market, where access to dollars is more readily available but at a much higher price. The dependence on the parallel market leads to inflation and devaluation because, when the dollar price in this market rises, the prices of goods and services also increase. Furthermore, the continuous loss of the bolivar’s value against the parallel dollar makes it harder to access basic goods and services, which increases inequality in the economy.
4. Change in the Trend of Tax Months
The unofficial dollar exchange rate above Bs. 100 also breaks with the trend observed over the past three years, according to economists, during which the exchange rate usually decreased during tax payment periods. This happened because many people sold their dollars to meet their tax obligations, such as the Income Tax (ISLR).
This behavior suggests that the supply of dollars in the market has not been sufficient to reduce the exchange rate.
5. Impact of the Dollar Increase on Salaries in Venezuela
The minimum wage in Venezuela has not been adjusted since March 3, 2022, when it was set at 130 bolivares, which at that time was equivalent to approximately $30. Currently, its value has dropped to only $1.27.
In March 2025, El Diario compared the products and services that could be purchased with 130 bolivares three years ago to what is possible today.
In 2022, the price of precooked corn flour ranged from Bs. 5.44 ($1.24) to Bs. 6.50 ($1.49) for a kilogram. Rice and pasta were priced between Bs. 5.56 ($1.20) and Bs. 6.20 ($1.44), respectively.
In 2025, the price of precooked corn flour is between Bs. 52.96 ($0.80) and Bs. 62.20 ($1.00) for a kilogram. Rice is priced between Bs. 74.64 ($1.20) and Bs. 111.96 ($1.80). A kilogram of pasta sells between Bs. 80.86 ($1.30) and Bs. 133.73 ($2.15).
Although product prices have remained relatively stable in dollars, the bolivar has lost significant value. In 2022, with 6 or 7 bolivares, a person could buy a kilogram of corn flour, rice, or pasta. By 2025, these same products cost between 52 and 110 bolivares, reflecting the depreciation of the currency and the reduction in purchasing power in Venezuela.
Translated by José Silva
