Question

Using daily close data, please plot the following two exchange rates on the same chart:

i) exchange rate between VEF (Venezuelan Bolivar) and USD from 1 July 2013 to 30 June 2020;

ii) exchange rate between Bitcoin (BTC) and USD from 1 July 2013 to 30 June 2020; Indicate one specific point on each of these two lines where the trend changes, and provide some reason(s) why this is the case.

Please clearly mark the description and the relevant information on the axes, and provide data sources. Use the left axis for the VEF/USD exchange rate, and the right axis for the BTC/USD exchange rate.

Answer 1

Venezuelan Bolivar or bolívar soberano (sovereign bolivar symbolized as Bs.S) has been the main currency of Venezuela since 20 August 2018 only. It replaced the bolívar fuerte (VEF - symbolized as Bs.F) after a transition period. The primary reason for replacement, at a rate of 1 Bs.S. to 100,000 Bs.F, was tocontrol hyperinflation.

Hence it is ambiguous to want to compare USD/VEF vs bitcoin/usd from the year 2013.

THE POSSIBLE CHART WOULD BE:

DATA SOURCE:

for USD/VEF - https://in.investing.com/currencies/usd-vef-historical-data?end_date=1593455400&st_date=1372617000

for Bitcoin/ USD - https://in.investing.com/crypto/bitcoin/btc-usd-historical-data