[ad_1]
One million percent is expected to reach Venezuela's inflation rate this year. The socialist government relies on a simple antidote: it prints new bills.
Venezuelan President Nicolás Maduro has announced new bank notes for his country in crisis. The bills have five zeros less and should be published starting August 20, he said. In addition, the Bolivar will be in the future coupled with the new Petro cryptocurrency.
The new qualities of paper should have values of two to 500 – and correspond to a power of purchase currently of 200,000 to 50 million bolivars. For the moment, there is almost no more paper money in Venezuela. The most important note is currently the score of 100,000 bolivars, or nearly 30 cents, and even less than a dime on the black market. Currently, a dollar costs about 3.5 million bolivars.
Serious crisis despite oil wealth
The cancellation of the five zeros "will facilitate financial operations and protect the bolivar," Maduro said. He acknowledged that the economic model focused on the oil industry had served its purpose. On the contrary, the country has to expand its economy and produce more products itself.
The richest country in the world has been facing a serious economic crisis for years. Due to corruption and mismanagement, Venezuela has virtually no foreign currency to import food, medicine or staples. Two days ago, the International Monetary Fund (IMF) warned against inflation of more than one million percent in Venezuela. The IMF compared the situation to that of the Weimar Republic after the First World War
. In addition, the economic output could decrease by 18%. The Venezuelan central bank has not released data on inflation and the economy for years. The reason for galloping inflation in Venezuela is the "economic war," which has led the Venezuelan opposition and the United States against it, Maduro said. They wanted to overthrow him.
Not the first attempt
Maduro said that currency conversion would cause "great revolutionary changes in the economy." In the past, the Venezuelan government was tempted to print new funds for an improved economy: in 2008, President Hugo Chávez canceled three zeros of the currency. In March of this year, Maduro announced new funds with three zeros less. However, the plan has never been implemented and inflation has continued to increase.
Source link
