Given the continuous devaluation of the Venezuelan Bolívar, merchants in the Portuguesa state have begun to adopt coffee as a currency for payment of transactionsin a municipality of the state located in western Venezuela.
The information reviewed in the main local media in the country this Thursday, May 18, It is a significant fact that highlights the seriousness of the economic crisis in Venezuela. The fact that merchants are willing to accept coffee in exchange for goods and services is a sign that the Bolívar is practically worthless.
The price of coffee has remained relatively stable in recent months, while the Bolívar has lost more than 90% of its value against the US dollar.. This has made coffee a more attractive option for traders looking for a way to protect their profits from inflation.
“We don’t do it because we want to,” says a merchant from Guanare, the capital of Portuguesa. “We do it because we have to.”
The use of coffee as currency is not without difficulties. For one thing, it can be difficult to determine the exact value of a cup of coffee in Bolivares. Furthermore, coffee is a perishable product, which means that traders must be careful to sell it before the raw material deteriorates.
Despite these difficulties, the use of coffee as currency is increasingly popular in Portuguesa. Traders say that it is a way to keep their businesses afloat in these times of economic difficulties and extreme heat, which directly affect the harvest of their crops, thus hindering production income.
“We’re just trying to make the best of a bad situation,” says another trader. “Coffee is the only thing that works for us right now.”
The use of coffee as currency is a sign of the desperation of Venezuelans struggling to cope with the country’s economic crisis.. It is also a reminder of the importance of coffee for the Venezuelan economy.
Coffee is one of Venezuela’s main export products and constitutes an important source of income for many Venezuelans, even being the main source of income for the nation before the discovery of the first oil well in July 1914.
The use of coffee as currency is a temporary solution to a much bigger problem. The Venezuelan government must take steps to stabilize the economy and restore the value of the Bolívar, something that has not been possible for the past two decades.
In Venezuela, strict exchange control has been in force since February 5, 2003.after the late President Hugo Chavéz created the Foreign Exchange Administration Commission -CADIVI-, to prevent ‘capital flight’ after the 2002 oil strike.
As a consequence, since January 2008, the date on which the first reconversion of the Bolívar occurred, eliminating three zeros from the currency, 14 zeros have been eliminated from the nominal value of the currency in the last 15 years.
The last conversion of the currency carried out last August 2021, eliminated six zeros from the value of the currency, a sign of the strong devaluation that the once ‘Bolívar Fuerte’ has suffered.
It is not the first time that coffee has been taken as a reference in Venezuela in recent years to overcome the economic crisis. Bloomberg’s Café con Leche index has been implemented in the nation as an accurate value to measure inflation in Venezuelaa key parameter for financial planning among merchants and entrepreneurs in the nation.
The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.