Dollar surges nearly fivefold in Venezuela amid inflation and sanctions

Venezuela ended the year with the official price of the US dollar rising by nearly 479 percent over the past 12 months, highlighting deepening economic strains as tensions with the United States intensify.

The central bank set the official exchange rate on Wednesday at 301.37 bolivars per dollar, up from 52.02 bolivars at the start of the year. At the same time, the gap between official and black market rates has widened sharply, with the dollar trading near 560 bolivars on informal markets, an 85 percent premium.

The economy has become increasingly dollarized as citizens seek protection from hyperinflation and currency instability. Economists estimate that around 80 percent of currency exchanges now take place through crypto-based black market platforms.

Despite President Nicolas Maduro’s projection of nearly nine percent economic growth in 2025, Venezuela continues to face soaring inflation, a shortage of hard currency and declining economic activity. Private analysts warn inflation could exceed 500 percent this year, while official inflation data has not been released since October 2024.

US pressure has also increased, with President Donald Trump tightening sanctions and ordering the seizure of oil vessels linked to Venezuela. The country has been under a US oil embargo since 2019 and sells most of its crude on the black market at discounted prices, further straining state revenues.