CARACAS − Venezuela’s President Nicolas Maduro ordered a “re-denomination” of the ailing bolivar currency on Thursday, by knocking three zeroes off amid hyperinflation and a crippling economic crisis.
The measure to divide the so-called bolivar fuerte − or “strong bolivar” − currency by 1 000 would take effect from June 4, the socialist leader said.
The move illustrates the collapse of the bolivar, which has fallen 99.99 per cent against the US dollar on the black market since Maduro came to power in April 2013.
But Maduro, 55, presented the revaluation as a positive development intended to protect Venezuela against currency speculators and a U.S.-led “economic war” against the OPEC member country.
Millions of Venezuelans are suffering from shortages of food and medicines during a fifth year of recession that critics blame on government incompetence and corruption, but Maduro says is due to Western hostility against him plus the fall of oil prices.
A $100 purchase of bolivars when Maduro came to power would now be worth just a single US cent.
“Venezuela has been victim of a brutal, economic war,” said Maduro, whose government has been targeted by the United States, European Union and Canada for sanctions over allegations of abusing democracy and rights.
Maduro made the announcement during an event shown live on TV, flanked by aides and bankers, to discuss Venezuela’s new petro cryptocurrency.
Venezuela’s government similarly “re-denominated” its currency by knocking off three zeroes a decade ago.
Prices in Venezuela rose 6 147 per cent in the 12 months through February, according to estimates by the country’s opposition-led National Assembly, broadly in line with independent economists’ figures.
Maduro is running for re-election on May 20 in a vote critics say is rigged to extend the socialists’ rule.
The opposition coalition is boycotting the vote, though one leader Henri Falcon has broken ranks to run against Maduro. He is promising to dollarise Venezuela’s economy as a way to beat hyperinflation and regain investor confidence. (Reuters)
