CARACAS, Oct 31 (Reuters) - Venezuela’s bolivar currency weakened on Monday past 1,500 per dollar on the black market following a 19 percent depreciation of the exchange rate since last week, according to widely-watched website DolarToday.
The government of President Nicolas Maduro maintains exchange controls that sell dollars for 10 bolivars to import priority goods and for 659 bolivars for less important items.
But businesses and individual citizens are broadly unable to access dollars at either of those rates, and thus end up buying on less favorable terms on the black market.
The black market rate is often characterized as opaque and easily manipulated, but is used nonetheless as a benchmark by Venezuelan businesses seeking to set prices and foreign investors gauging the health of the economy.
The South American OPEC nation is struggling with runaway inflation and Soviet-style product shortages as a result of a decaying socialist economic system and low oil prices that have cut into hard currency earnings.
DolarToday, which was for months accused by government officials of leading a campaign against Maduro, showed the rate reaching on Monday 1,501 compared with 1,222 one week earlier.
The sharp depreciation followed a 4 percent increase in the total supply of bolivars in the week to Oct. 21, according to central bank statistics. Adding bolivars to the economy generally puts pressure on the exchange rate.
The funds that banks have available to make commercial loans, an indicator known as “excess bank reserves,” nearly doubled in the same period, according to the central bank.
Businesses frequently borrow in bolivars and then use the funds to buy dollars to profit from a depreciating exchange rate by later selling dollars at a better rate.
Maduro says his government is victim of an “economic war” being waged by opposition leaders with the help of Washington. (Reporting by Brian Ellsworth; Editing by Alan Crosby)