February 3, 2016 / 10:06 PM / a year ago

Venezuela unofficial exchange rate weakens below 1,000 bolivars/dollar

2 Min Read

CARACAS, Feb 3 (Reuters) - Venezuela's bolivar currency weakened on Wednesday, sliding below the 1,000 per dollar threshold, according to website DolarToday, an 81 percent depreciation from a year ago as the country struggles under low oil prices and a sputtering state-led economic model.

The 13-year-old currency control system sells dollars for a mere 6.3 bolivar for food and medicine, but there have been fewer dollars to distribute due to a slump in the price of oil, the country's principal source of export revenue.

Venezuelans seeking to protect themselves from triple-digit inflation have snatched up greenbacks on the black market, further weakening the unofficial rate.

The country's central bank last year filed a lawsuit against DolarToday.com in the United States, accusing the site's proprietors of manipulating the exchange rate for personal benefit at the expense of the country's consumers.

DolarToday, which is openly anti-government and regularly pokes fun at President Nicolas Maduro on Twitter, says it simply publishes the exchange rate based on information obtained from currency traders on the border and denies that it sets the rate.

Economists say the black market rate lacks transparency because it has no regulatory oversight, and insist the solution is to lift currency controls moving to a market based system.

Venezuela is suffering a severe recession, product shortages reminiscent of Soviet bloc nations and annualized inflation that reached 141 percent in the first nine months of 2015.

Maduro blames the situation on an "economic war" led by adversaries including DolarToday.

Critics say the problems are caused by currency and price controls, unproductive state-run companies and a vast expansion of the money supply. (Reporting by Brian Ellsworth; Editing by David Gregorio)

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