November 28, 2018 23:03
Updated November 28, 2018 23:17
Ten days after President Nicolas Maduro announced a salary increase to 1,800 sovereign Bolivars, that is, on 29 August this year, the price of a dollar for 60.89 bolivars was set at the auction of the Exchange Market Exchange Rate System (Dicom) the price of the euro, which is now the benchmark for all government operations, was 71.16 bolivares.
The monthly minimum wage was equivalent to 29.87 US dollars (or 25.29 euros) if the Dicom rate was taken into account.
This Wednesday, exactly three months later, the Central Bank of Venezuela published new results of the Dicom auction, which indicated the devaluation of the bolivar against international currencies, setting the dollar to 85.87 bolivars and euros on BsS 96, 84.
The change in the exchange rate was 41.02%, and the depreciation of the bolivar against the dollar was 29.09%, that is, that the salary established by Maduro decreased by almost 30% of its value relative to the dollar. since the time when the economic recovery program was announced.
Depreciation for the euro is 25.89%.
For practical purposes, we can say that Venezuelans received a minimum salary of $ 30 a month in September, taking the Dicom rate as a reference, and at the end of November this salary dropped to $ 20.
The devaluation becomes even higher if you consider the currency in a parallel market.
The problem of wages in Venezuela
Miguel Wellard, economist, explained National Network that wages in Venezuela have two aspects for which they should be analyzed: hyperinflation and loss of purchasing power.
“Everything is growing rapidly, and the purchasing power of wages is decreasing. That is, the real value of the sovereign Bolivars received by the Venezuelan workers is becoming less and less, ”he said.
For the economist, the problem, however, goes far beyond the official rates. Difficult access to official currencies means that businessmen should look for alternatives to support the country's imports and supplies.
“For a long time, there are products whose price depends on the unofficial exchange rate. Much more when we talk about products that are not produced here. To import dollars you need, and to get access to these dollars, you need to look for alternatives, because Dicom has a limit, he said.
Welard explained that purchasing power is therefore lower because the growth rate has increased over the past three months.
“If it is assumed that the salary is governed by this type of change, it was devalued. And the truth is that it is still much more relative to the parallel exchange rate. Products that Venezuelans should receive are not regulated by the official rate. ”
– Central Bank of Venezuela (@BCV_ORG_VE) November 28, 2018