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Venezuela money supply up 14 percent in one week, fastest rise on record
December 1, 2017 / 3:48 PM / 12 days ago

Venezuela money supply up 14 percent in one week, fastest rise on record

(Reuters) - Venezuela’s money supply rose a whopping 14 percent in just one week last month, its steepest rise since records began in 1940, according to central bank figures released Friday.

A worker counts Venezuelan bolivar notes at a gas station of Venezuelan state oil company PDVSA in Caracas, Venezuela December 1, 2017. REUTERS/Marco Bello

The increase is fueling the world’s highest inflation and a worsening crisis gripping the oil-rich nation.

The money supply indicator - summing up cash, together with checking, savings, and other deposits - is key to understanding Venezuela’s crisis, in which millions struggle with food shortages and soaring inflation.

The opposition-led National Assembly estimates price rises of 826 percent in the year to October.

They blame a decade and a half of strict economic controls. The central bank has not published inflation data since early 2016.

People walk past an entrance of the Venezuela's Central Bank in Caracas, Venezuela December 1, 2017. REUTERS/Marco Bello

Money supply traditionally increases more rapidly in Venezuela in the weeks leading up to December, in the run-up to Christmas. Last year, the average weekly rise over November was around 6 percent.

The 14 percent rise in money supply the week ending Nov. 24 this year followed three weeks in which the figure rose 10 percent every week, itself a record.

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Critics see this as a demonstration of a reckless government that is digging itself deeper and deeper into crisis.

When President Nicolas Maduro came to power in April 2013, the bolivar currency was at 24 per dollar; on Friday it surpassed 100,000 for the first time.

A thousand dollars in Venezuelan currency bought in April 2013 would be worth some 25 cents now.

Maduro blames the crisis on an “economic war” waged by Washington and the country’s opposition, which Washington has denied.

Reporting by Girish Gupta; Editing by Phil Berlowitz

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