The cost of a cup of coffee in Venezuela jumped the most since May, signaling a recent crash in the bolivar is pushing up prices.
(Bloomberg) — The cost of a cup of coffee in Venezuela jumped the most since May, signaling a recent crash in the bolivar is pushing up prices.
Bloomberg’s Cafe con Leche Index rose 25% in a week to 19.63 bolivars, or roughly $2.50. The rise shows the swift effect currency depreciation has on prices. Last week, the bolivar posted its largest monthly loss since January 2021, losing a third of its value on the parallel market.
Since the country exited a bout of hyperinflation at the start of the year, the government has worked to keep price increases under control. Annual inflation, however, is still running at 150%, according to the index, which tracks the price of a cup of coffee served at a bakery in eastern Caracas.
The bolivar weakened as the government began printing more to make good on labor commitments and the central bank sold less hard currency to banks, pushing up demand for dollars. The currency depreciated more than 20% at the official exchange rate last week, settling at around 7.85 bolivars per dollar on Friday.
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