Venezuela: Dicom and parallel rate continue to depreciate sharply
September 7, 2017
On 5 September, the bolivar traded in the parallel market at 19,491 VEF per USD. The result marked a slight 2.6% depreciation from the same day last month. The parallel dollar has shed 83.8% of its value since the start of the year and a stunning 94.8% from the same day last year.
The bolivar traded in the parallel market has experienced a pronounced devaluation since the start of Q3, continuing an almost uninterrupted depreciation since Q4 2016 due to a reduction in the Central Bank’s reserves requirement and an increase in monetary financing to PDVSA. Political developments have continued encouraging the sustained depreciation the currency has suffered since the end of last year.
Panelists participating in the LatinFocus Consensus Forecast see continued pressure on the parallel dollar and project a non-official exchange rate of 21,879 VEF per USD by the end of 2017. In 2018, the panel sees the non-official exchange rate trading at 37,409 VEF per USD.
Meanwhile, the Dipro exchange rate—the first tier of the official exchange rate system—remained fixed at 10.00 VEF per USD on 5 September. According to the government, the Dipro is used exclusively to purchase essential goods, such as medicine and food products, and can face devaluations when authorities deem it necessary.
The Dicom exchange rate, the second tier of the exchange rate system introduced by the Central Bank, traded at 3,340 VEF per USD on 5 September, marking an 11.2% depreciation compared to the same day last month and a 79.8% depreciation since the start of 2017. The Dicom has lost 80.7% of its value from the same day in 2016.