Venezuela changes currency in desperate measure to stop economic collapse
On Tuesday, Venezuelans will see the introduction of new banknotes, re-named “the sovereign bolívar”. The largest denomination note — 500 bolívars — will be worth 50,000,000 old bolívars — around $8 at the current black market rate. Adding to the potential for confusion, the old and new bolívars will run in parallel for a while until the old ones are phased out.
Venezuela resorted to desperate measures to arrest an economic collapse on Monday, lopping five zeros off the bolívar, devaluing it by 95 per cent and tying it to an obscure state-run cryptocurrency. Apart from devaluing its currency the country aims to raise the minimum wage by more than 3,000% in what the country’s president, Nicolás Maduro, declared a visionary bid to tame rampant hyperinflation.
Opponents of the socialist government of Nicolás Maduro called for strikes and protests on Tuesday, when shops and financial institutions reopen after a bank holiday was used to put the drastic reform into effect. As it tries to curb hyperinflation — which, by some measurements, is the worst in Latin American history — the government is also slashing fuel subsidies and raising the minimum wage by 3,000 per cent.