The bolívar fuerte is the new currency of Venezuela since 1 January 2008. It is subdivided into 100 céntimos and replaced the bolívar at the rate of 1:1,000 due to inflation.
Bolívar
The bolívar was adopted by the monetary law of 1879, replacing the short-lived venezolano at a rate of 5 bolívares = 1 venezolano. Initially, the bolívar was defined on the silver standard, equal to 4.5 g fine silver, following the principles of the Latin Monetary Union.
The monetary law of 1887 made the gold bolívar unlimited legal tender and the gold standard came into full operation in 1910. Venezuela went off gold in 1930 and in 1934 the bolívar exchange rate was fixed in terms of the U.S. dollar at a rate of 3.914 bolívares = 1 U.S. dollar, revalued to 3.18 bolívares = 1 U.S. dollar in 1937. This rate lasted until 1941.
Until February 18, 1983 (now called Black Friday (Viernes Negro) by many Venezuelans, the bolívar had been the region’s most stable and internationally accepted currency. Since then however, it has fallen prey to high devaluation.
Exchange controls were adopted since February 5, 2003 to limit capital flight, pegged to the U.S. dollar at a fixed exchange rate of 1600 VEB to the dollar.
Bolívar Fuerte
The government announced on 7 March 2007 that the bolívar would be revalued at a ratio of 1 to 1000 on 1 January 2008 and renamed the bolívar fuerte in an effort to facilitate the ease of transaction and accounting. The new name is literally translated as “strong bolívar” but also references an old coin called the Peso fuerte worth 10 Spanish reales.
The name “bolívar fuerte” is only used temporarily to distinguish it from the older currency that is being used along with the bolívar fuerte.
The Central Bank of Venezuela is promoting the new currency with an ad campaign and the slogan: “Una economía fuerte, un bolívar fuerte, un país fuerte” (lit. “a strong economy, a strong bolívar, a strong country”). Nevertheless, the black market value of the bolívar fuerte has been significantly lower than the fixed exchange rate of 2.15 (in February 2008 it was as high as 7.0 to 1). It is illegal to publish this “parallel exchange rate” in Venezuela.
Some estimations suggest that the government spent more than US$320,000,000 to introduce the new currency.
On 8 January 2010, the value was changed by the government from the fixed exchange rate of 2.15 bolívares fuertes to 2.60 bolívares for some imports (certain foods and healthcare goods) and 4.30 bolívares for other imports like cars, petrochemicals, and electronics.
On 4 January 2011, the fixed exchange rate became 4.30 bolívares for 1.00 USD for both sides of the economy.
It should be noted that the official value of 4.30 is restricted to individuals by CADIVI, which imposes an annual limit on the amount available for travel (up to $3000 annually depending on the location and duration of travel) and $400 for electronic purchases.