Exchange disparity affects both merchants and consumers

An economic labyrinth. This is the path that Venezuelans travel as a result of the exchange disparity which has become a daily obstacle for consumers and merchants.

This Wednesday, the official rate of the Central Bank of Venezuela (BCV) is at 37.07 bolivars per dollar, while the parallel rate is at 46.99 bolivars, which represents a difference of 26.76%.

This gap has generated an environment of uncertainty that affects merchants and consumers.

Sell ​​to lose due to the exchange difference

Pedro Méndez is the owner of an appliance repair shop in the north of Valencia, with a significant number of clients that has increased, he said, due to the breakdowns caused by the electrical fluctuations.

But although work continues to come to his business, he feels trapped between the need to stay afloat and the pressure of prices.

“When I have to buy parts to fix a refrigerator, I have to do it at the parallel rate. I have no other choice. But when I charge my clients, I do it at BCV rate. This leaves me at a critical point. “I always end up losing,” he explained with frustration while checking the tools in his workshop.

Luisa Figueredo, a clothing merchant in Naguanagua, reflects a similar struggle. “Recently my clients prefer to pay me in bolivars and not in dollars for the exchange differenceand I must sell at the official rate and have it visible because the police are always inspecting it, but I replenish my inventories at the parallel rate.”

He reported that the clothes are sold by an importing company that charges an unofficial dollar. “The difference is felt in every sale. “Sometimes I have to close the business because I can no longer offer competitive prices.”

Consumer anguish

Consumers also suffer the consequences of this exchange rate disparity. Ana Sánchez, mother of two children, works in the industrial zone of Valencia and receives her salary in bolivars at the official rate.

“Money doesn’t work for me. When I go shopping, prices are much higher in informal businesses, which operate at parallel rates. “Sometimes I can’t even buy what I need for my children.”

Freelancer Carlos Jiménez faces a difficult decision every time he tries to exchange his dollars for cash. “When I have dollars I cannot sell them at the official rate. The change is very low. When I look for bolivars I have to pay a high commission in the parallel market. “It’s crazy, but there is no other way to get what I need,” he explained.

Exchange history of Venezuela

To understand the current context it is necessary to look back. In 2020 the official exchange rate was approximately 80,000 bolivars per dollar, while the parallel rate reached 130,000 bolivars before the 2021 reconversionwhich eliminated six zeros from the currency.

Although inflation has been drastically reduced, the value of the bolivar in the exchange system continues to be volatile and unequal. In 2021 the BCV attempted to stabilize the exchange rate, but parallel rates continued to increase, reaching a difference of 50% at some times during the year.

This 2024 the situation appears to have improved compared to previous years, but the 22.9% gap is still alarming and reflects an unreliable exchange system. Despite the government’s efforts, the dollar continues to dominate transactions in the country, leading many to operate in the parallel market.

Economist Wilson Pinto pointed out that this exchange disparity It is a symptom of deeper problems in the Venezuelan economy. “The fact that merchants have to operate at parallel rates reflects a lack of confidence in the national currency. Without effective measures to control inflation and stabilize the exchange rate, the crisis will deepen,” he added.

He assured that as long as parallel rates continue to influence the economy, merchants and consumers will continue to be trapped in a cycle of uncertainty that affects their quality of life.

The challenge of the last quarter of 2024: the exchange rate disparity

Ernesto Abas, president of the Valencia Chamber of Commerce, expressed that the main challenges for this last quarter of the year are rooted in the gap between parallel dollar and the BCV dollar.

“This exchange rate differential generates distortions in the economy and is difficult to overcome by the commerce sector,” he said.

Added to this is the credits that the sector gives to its clients and that has helped drive consumption a little.

“Another challenge is that when the end of the year comes, we have to prepare all the bonuses and profits, and this requires greater cash flow. Given this, we hope, of course, that consumption improves,” Abbas added.

He highlighted that the commerce sector has products, goods and services to attend the Christmas season.

“We hope that the electric energy service supplied by the responsible companies continues to maintain in some way the behavior of these last two weeks, which has improved and allows us to serve the customers much better. customers,” he said.