Venezuela is being overrun by counterfeit dollars as the economy goes into freefall and the cost of mansions plunges to just $40,000.
The South American country’s national currency is the bolívar but during a four-year period of hyperinflation, it has become practically worthless.
The government has said the annual inflation rate fell from 686 percent in 2021 to 234 percent in 2022, but it still remains one of the highest in the world.
But now Venezuela is being hit by a new crisis, with more vendors forced to buy electronic equipment to identify counterfeit dollars flooding into the country, according to InSight Crime, a think tank and media firm specializing in organized crime in Latin America and the Caribbean.
It has been an ongoing problem, with the use of counterfeit currencies exploding in 2017 when Venezuela’s currency plummeted and dollars began to be used.
In May 2023, dollars were used in more than half of all commercial transactions nationwide, according to figures from the consulting firm Ecoanalítica.
The latest figures from Ecoanalítica estimate there were almost $4.825 billion US dollars in circulation in August 2023 – almost double the $2.6 billion in circulation during 2019.
An economist from the Venezuelan Observatory of Finance told Insight Crime the increase in the circulation of dollars in Venezuela “is an inviting scene for any mafia that is making fake dollars to join”.
Fake banknotes are flooding in from abroad, with Colombia and Peru mainly responsible for the production of counterfeit dollars trafficked into Venezuela, according to the US Secret Service.
Venezuela’s huge inflation rate and continued depreciation of local currency have led to a massive influx of dollars into the country – providing opportunities for fake notes to circulate and largely go unnoticed.
In October 2022, Douglas Rico, director of the Scientific, Criminal and Criminalistic Investigations Corps (CICPC), said it had been receiving up to five reports of counterfeit dollars per month during that year.
A Venezuelan vendor explained to InSight Crime that criminal networks alter lower denomination bills and pass them off as higher-value bills in order to get them into the country’s legal economy.
The merchant said: “In stores, they hand over a bill that, on one side is for $100, but the machines read them as $20.”
Fake dollars have been flooding into Venezuela over the past six years when the country’s currency fell apart due to hyperinflation and questionable government economic policies. The US dollar soon provided a more attractive alternative.
In 2018, President Nicolás Maduro was forced to abolish the Law of Illicit Foreign Exchange to try and stem the avalanche that began to circulate nationwide, removing restrictions on buying and making transactions with foreign currencies.
But in 2021, the US currency was being used for more than half of transactions in Venezuela.
The flood of fake bills into Venezuela comes with migration in the country sending the price of luxury houses plummeting. Some properties – just a few steps from the beach – have dropped to as low as $40,000
Follow our social media accounts here on https://www.facebook.com/
