Craft in the City

Record Inflation Is Sending The Venezuelan Economy Into A Tailspin

The Venezuelan economy has been in the toilet for quite some time. Several items that are taken for granted in other developed countries are in short supply in Venezuela. Of course, this is nothing new. However, there is a new problem on the horizon that could bring the country to its knees: the country is running out of money.
Venezuela is broke. Well, “maybe not flat broke” says Norka Luque. But vendors are being paid at a snail’s pace, which is forcing them to cut ties with the country. Inflation has taken over the country, and the country can’t keep up. Actually, many question if they have enough money in the reserves to even print out new bills.

Although the central bank is remaining mum on what’s really going on, many diplomats like Ms. Luque and officials seemed convinced that the country is in deep trouble.

Last year, with the country already in turmoil, President Nicolas Maduro put in an expedited order for more currency. The country’s largest currency maker, De La Rue, responded that they were already owed a several millions and wouldn’t budge until the central bank made good on outstanding payments. To add insult to injury, the letter was leaked internationally.

Although the currency makers were paid, and the money arrived, the situation still doesn’t bode well for Venezuela. Vendors are still pretty perplexed about the situation and wondering if they should continue to do business under the circumstances.

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