CARACAS -(Dow Jones)- The dollar in the Venezuelan parallel market held steady on Tuesday against the bolivar as traders said the market was still recovering from last week's steep drop.

A dollar fetched 5.1 bolivars, unmoved from the previous day, traders said. Last week the dollar dropped to VEB4.8 after hitting VEB5.8 on Oct. 23, as the government apparently intervened and sold dollars in the unofficial market.

There are no indications that the government has continued selling dollars in the unofficial market, traders said.

Venezuela pegs the dollar at an official exchange rate of VEB2.15, but after years of double digit inflation, the rate has stayed the same, leading to a severely overvalued currency. According to Ecoanalitica, a Caracas-based economic research firm, the peg should be 80% higher to reflect the true value of the Venezuelan currency.

Investors who can't get approval from the government's currency board to buy dollars at the official exchange rate turn to the black market to buy U.S. currency.

-By Darcy Crowe, Dow Jones Newswires; (58) 212 905 6304; darcy.crowe@ dowjones.com