A heavy foreign debt burden, falling crude production and increased domestic usage have caused Venzuela's foreign reserves to fall to a record low of $18.2 billion as of May 7th.
Its international reserves fell $507 million dollars on Thursday alone, pushing toward the $18 billion level and marking a new low since 2003.
While foreign reserves fall, the Central Bank has increased the supply of bolivars in circulation in Venezuela 67.1% in the last 12 months.
The move has caused rampant inflation that local investment bank Caracas Capital Markets now clocks at 165% per year.
In short, the country is in economic free-fall, with the fate of the bolivar now in question. Similar issues in Uruguay 15 years ago led to the country using the U.S. dollar for stability.
The reserves have now fallen $4.101 billion since the beginning of the year yet even the accuracy of those numbers is in question as, on May 4th, the Central Bank reported that reserves were $19.79 billion but then revised that number a full $1 billion lower at $18.79 a day later with no explanation.
To put how perilous Venezuela's situation is into perspective, Brazil has $362.74 billion in foreign reserves, Peru has $60.97 billion, Colombia has $46.54 billion, Chile has $38.03 billion, and Argentina has $31.49 billion, according to the IMF.
In addition to falling oil revenue, Venezuela is also paying high prices on its foreign bond debt.
Venezuela, along with state owned enterprises PDVSA and Citgo, will pay over $11 billion to service foreign debt this year. These enterprises along with its nationalized electric company Electricidad de Caracas, paid $755.7 million in foreign bond interest payments in April alone.