Venezuela’s currency is in free fall.
Violent protests are growing, the economy is spiraling further out of control and Venezuelans are suffering through shortages of food and medicine. And the bolivar, already worth next to nothing, keeps losing value.
At the beginning of the year, it took about 3,000 bolivars to buy one U.S. dollar. By Wednesday, it took almost 8,000. That’s according to dolartoday.com, which tracks the unofficial exchange rate used by most Venezuelans because official rates are considered overvalued.
“I’d describe it as the result of a government that prints money like it’s confetti,” says Raul Gallegos, senior analyst at Control Risks, an international consulting firm. “The government has simply employed the wrong policies to stay in power.”
Government corruption and mismanagement have triggered hyperinflation. Prices are set to rise a staggering 720% this year, according to the International Monetary Fund. The collapse of the economy and currency has driven shortages in food, medicine and basic products like toilet paper.
The country has been gripped by unrest as Venezuelans call for President Nicolas Maduro to step down or hold democratic elections. Since late March, 74 people have been killed and more than 1,400 injured in protests.
On Tuesday, the crisis escalated when a Venezuelan police officer and a team of accomplices stole a government helicopter and flew it over the Supreme Court, firing shots and lobbing grenades. The police officer demanded that Maduro resign.
Venezuelan lawmakers opposed to Maduro also clashed with national guard officers outside the National Assembly in a dispute involving an upcoming vote on constitutional changes.
Late Tuesday night, Venezuela’s Supreme Court justices — Maduro appointees — stripped the attorney general of the power to investigate human rights abuses. They gave the power instead to an ombudsman friendly to Maduro.
Venezuela sits on the world’s largest oil reserves and was once the wealthiest nation in South America. But since 1999 the government has focused only on selling oil to other countries and abandoned management of other natural resources and critical infrastructure.
Now Venezuela is running out of money. Its central bank only has $10 billion in reserves, which are intended to be a cushion to weather a crisis. In 2011, it had $30 billion.
–Lonzo Cook and Marilia Brocchetto contributed to this report.