EspañolDespite Venezuelan government efforts to rein in the bolívar exchange rate, the nation’s currency has crumbled to a record 214 Bs. per US dollar.

On Tuesday, February 24, the black-market exchange rate weakened to below 200 Bs. for the first time, according to widely referenced DolarToday.com, only to lose a further 7 percent of its value in a single day. With transactions in cash becoming increasingly difficult — the largest denomination of 100 now worth a mere 47 US cents — the economic pressure has incited President Nicolás Maduro to declare his intention of “defeating the US dollar.”

Así cotiza el $ a esta hora BsF. 214,18 y el € a BsF. 240,25 entra sin bloqueos https://t.co/QtxtN3ROCX pic.twitter.com/wys5pWVT9d — DolarToday® (@DolarToday) February 26, 2015

“The bolívar is being traded at 214.18 per US Dollar and 240.25 per euro, with no impediments.”

The bolívar has plummeted into a free fall in recent years, Ricardo Hausmann said on Wednesday, head of the Center for International Development at Harvard University.

“It took one year to fall from 50 to 100 [Bs. per dollar], and five months to go from 100 to 200,” he tweeted. Hausmann forecasts that if the current trend continues, by December the bolívar will be traded at 800 Bs. per dollar in the black market.

This news comes after President Maduro announced on Tuesday, February 10, a new currency exchange system, named the Marginal System of Foreign Currency (Simadi) and effective since February 19.

“With the new system we are putting an end to the mafia of the black dollar,” Maduro said. “This is why I created the Simadi. This is why I created an exchange system to protect the people.”

Venezuela’s prevailing three-tiered currency exchange mechanism offers a preferential rate of 6.3 Bs. to the dollar for approved imports of food and medicines, a complementary rate of 12 Bs. per dollar, and the new “floating” rate determined largely by demand and supply. The Simadi, with limited intervention, debuted at around 172 Bs. per dollar, or 27 times the preferential rate.

Maduro has claimed that only 1 percent of the population will need to access the new market, and thus the Simadi rate should not be referred to as a reference rate for the Venezuelan economy.

“I won’t allow the bourgeoisie to turn [the new rate] into the reference value. It will be a reference for the luxuries, but not for the real economy,” he said. Maduro also threatened to crack down on those using the Simadi rate as a reference with “energetic measures.”

Despite Maduro’s statement, the only alternative for a great majority of individuals and companies is to get dollars in the black market.

While Vice President for Economic Affairs Marcos Torres has claimed the new Simadi mechanism is “totally free,” economists and political analysts have been quick to raise doubts over this point. According to economist Henkel García, the Simadi is not a “free-floating” regime, since the “Venezuelan Central Bank can reject transactions when dollars are offered over the exchange rate fixed by the bank.”

The new system imposes daily, monthly, and annual caps of US$300, $2,000, and $10,000.

Prueba de si el SIMADI está funcionando o no es clara: SI alguien puede comprar dólares "libremente" a 172, ¿quién compraría a 214? Nadie. — Miguel Angel Santos (@miguelsantos12) February 26, 2015

“Evidence of Simadi working or not is clear: If someone can “freely” buy dollars at 172 Bs. Who would buy at 214? No one.”

The fall of oil prices has impacted the nation’s economy, since its main export has been the mechanism by which the government has secured foreign currency. The lack of US dollars has thus contributed to the widespread scarcity of basic consumer products as, with least 70 percent of the goods imported.

Venezuelans have found in the US dollar a safe haven, as severe inflation harms the purchasing power of the bolívar. According to the Cato Institute’s Troubled Currencies Project the implied annual inflation rate in Venezuela is 117 percent as of February 15, almost double the official inflation rate recorded at 68.5 percent in December 2014.