VES - Venezuelan Bolívar Soberano

Venezuelan Bolívar Soberano overview

The Bolívar Soberano (VES) was introduced by the Venezuelan government in 2018 to replace the previous currency, the Bolívar Fuerte (VEF). The primary purpose of issuing the Bolívar Soberano was to address the catastrophic inflation ravaging Venezuela's economy, devaluing the national currency and causing significant hardship for the population.

This was a major currency revaluation, where 1 VES was exchanged for 100,000 VEF. This meant that the government removed five zeros from the old denominations, making the currency easier to use in daily transactions and attempting to restore confidence in the national currency.

The Bolívar Soberano carries the meaning of a "sovereign" currency and represents the government's effort to rebuild an economy that had already been facing serious issues. However, these measures faced many challenges, and inflation continued to erode the value of the currency amid Venezuela's ongoing economic and political crisis.

History of the Bolívar Soberano Currency

Venezuela underwent a period of hyperinflation for many years. The main factors leading to this situation included the decline in oil prices — the country's main industry and primary source of foreign currency — along with ineffective economic policies and political instability.

The economic recession and uncontrolled inflation caused the Bolívar Fuerte to rapidly lose value. This led to an increased demand for foreign currencies such as the US dollar, making the national currency unreliable in the eyes of the people.

In response to this situation, the Venezuelan government decided to issue the Bolívar Soberano to restore confidence in the national currency and control inflation. However, the issuance of the new currency was only one of the temporary efforts. With the economy still facing significant difficulties, the Bolívar Soberano encountered major challenges shortly after being introduced.

Venezuelan Bolívar Soberano (VES) denominations

The Bolívar Soberano (VES) was issued in August 2018 to replace the old Bolívar (VEF) amid severe inflation in Venezuela. The Bolívar Soberano denominations are divided into paper money and coins. The paper money denominations include:

• 2 Bolívar: Smallest denomination, often used for everyday low-value transactions.

• 5 Bolívar: Common in daily exchanges, used for small purchases.

• 10 Bolívar: Mid-range note, often used in routine purchases.

• 20 Bolívar: Frequently used for larger, everyday transactions.

• 50 Bolívar: Moderate denomination, used in more significant daily dealings.

• 100 Bolívar: Higher value note, still common for transactions despite inflation.

• 200 Bolívar: Used for transactions in the higher price range.

• 500 Bolívar: Common for larger purchases, though its real value is greatly reduced by inflation.

• 1000 Bolívar: One of the higher denominations, often used for higher-value transactions.

• 2000 Bolívar: Highest denomination in the Bolívar Soberano series, used for larger-scale

These banknotes were designed to facilitate daily transactions for the people of Venezuela, although the actual purchasing power of the currency has been severely diminished due to hyperinflation.

In addition to paper money, coins are available in smaller denominations such as:

• 1 Bolívar

• 2 Bolívar

• 5 Bolívar

• 10 Bolívar

However, coins are less commonly used in practice, with the majority of transactions in Venezuela being conducted in paper money, despite its significant loss of value.

Exchange Rate of the Bolívar Soberano (VES)

The exchange rate of the Bolívar Soberano (VES) against other currencies, particularly the US Dollar (USD), has fluctuated significantly over the years due to uncontrolled inflation and the economic crisis in Venezuela. When it was introduced in August 2018, the Bolívar Soberano had lost 96% of its value compared to the previous Bolívar (VEF), meaning 1 USD could exchange for millions of Bolívars.

This situation persisted in the following years. In October 2021, the Venezuelan government issued a new version of the Bolívar, removing another six zeros from the denominations of the old notes. However, this adjustment did not lead to a sustainable improvement in the exchange rate. The Bolívar continued to depreciate against international currencies, especially the USD.

The constant changes in currency have created significant instability in the Venezuelan economy and diminished the ability to stabilize the exchange rate. Despite the adjustments, the Bolívar Soberano has still not managed to maintain stable value in the long term and has been unable to reduce the severe inflation that Venezuela faces.

The Bolívar Soberano (VES) has undergone significant fluctuations in value due to inflation and the economic crisis in Venezuela. Despite measures such as introducing new currency and removing zeros, the Bolívar has been unable to maintain a stable exchange rate. This has caused major difficulties for people and businesses in maintaining purchasing power and conducting transactions. This situation reflects the complexity and seriousness of Venezuela's economic crisis.