(Bloomberg) -- Venezuela's black market for dollars skyrocketed after the government doled out more than 50 billion in bolivar Christmas bonuses and pension payments -- and most rushed to trade them for dollars.
The currency has weakened 19% in the past week to 671,800, the biggest weekly drop since April, according to data from MonitorDolarVzla, which compiles prices from several sources. That compares with 646,322 bolivars at the official rate.
The massive bolivar cash injection--amounting to just over $85,000--has sent prices soaring in recent weeks, pushing the annual inflation rate above 5,400%, and will likely worsen existing cash shortages, according to local consulting firm Econometrica. Venezuelan officials have turned a blind eye to growing dollar transactions and are weighing plans to dollarize the local banking system as the bolivar becomes worthless following seven years of economic contraction.
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