The third currency reconversion entered into force in Venezuela: the bolivar lost 14 zeros under the Chavista regime

This Friday The third monetary reconversion implemented in Venezuela by the Chavist dictatorship has entered into force. The “digital bolivar” will be released with six zeros less than its latest version, released in 2018.

Since 2007, when then President Hugo Chávez announced the first revision of the monetary cone a total of 14 zeros have been removed from the Venezuelan bolivar, in an attempt to revive the value of the paper which after each change has reached to pay less things.

Until September 30 a million bolivars, about 25 cents, was not enough to buy a loaf of bread. This amount, which now becomes a bolivar, in turn represents 100,000 billion bolivars in 2007, a clear reflection of the incredible erosion of its value.

The increasingly undervalued bolivar and the high rate of transactions carried out in dollars turned the local currency into a simple piece of paper that children use in packets to play.

The scene takes place on a street in Puerto Concha, a hot town in the western state of Zulia, on the border with Colombia, where for many, the bolivar is history.

The tickets they are used to make wreaths and other figures, In addition to being used by children, who lie on the floor to play while having fun.

“If you put in a hundred, you win a hundred,” says a girl who coordinates Ajiley’s game, a very popular card game in Venezuela. to which the little ones gave a creative twist by exchanging the prizes with these useless tickets, which they store in a cardboard box in the shape of a guitar, with the back painted in the national colors.

The bolivar it has depreciated 72.54% so far in 2021 and this Friday six zeros are removed.

But in Puerto Concha, the national currency matters little or nothing. In recent years, they have become familiar with Colombian pesos, that they wear every day.

“Here the bolivar has already made history”, remarks Jonatan Morán, 32, a farm worker, from the counter of a warehouse full of Colombian products, cheaper than local products.

“I don’t even know the new bolivar that’s out, and I don’t want to know either. To do what ? », He asks himself dryly, in dialogue with the AFP.

There are residents of the city who remember that before the conversion decreed by dictator Nicolás Maduro in 2018, the second of the Chavista era, many left with buckets full of tickets to do their shopping.

DOLLARIZATION

With this new monetary “reprocessing”, “Venezuela becomes the Latin American country that has eliminated the most zeros from its currency”, emphasizes economist José Manuel Puente, convinced that in a few months the cycle will repeat itself and that the new bolivar will again lag behind.

This instability has widened the use of the Colombian peso in border states, while the country is experiencing de facto dollarization, that although it contradicts the “anti-Yankee narrative” of Chavismo, Puente points out, it is seen as an “escape valve” in the face of an economy with eight years of recession and four of hyperinflation.

Being a neighboring region of Colombia, many tend to change dollars to pesos in Puerto Concha, as this makes it easier to shop at retail, which does not happen with the greenback, because informal dollarization limits the flow of low-denomination notes and complicates operations.

“At the moment, the peso is more beneficial than the bolivar, because the bolivar does not give us», Says María Martínez, a 38-year-old lottery saleswoman, who hides her face with a sweater to protect herself from the sun.

The use of the bolivar has been practically limited to transactions with debit cards, due to a chronic lack of cash, necessary for the main activities of the city: fishing, cattle ranching and plantain planting.

There are no figures on the amount of Colombian pesos circulating in the Venezuelan economy. Instead, private sector estimates consider that in the country transactions in dollars represent 70% of transactions.

(With information from AFP)

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