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July 23, 2018 – 8:25 pm
Economist and opposition MP José Guerra said today that Venezuela is facing a traumatic monetary reconversion in the middle of the hyperinflation experienced by the country, for a process scheduled for August 4, which will involve the elimination of three zeros to the national currency.
The member of the Finance Committee of the National Assembly (Congress) presented a series of warnings on reconversion before a report from the International Monetary Fund (IMF) that predicted that Venezuela will close 2018 with inflation of one million percent.
Guerra said the country's banks have not received the new family of notes, which makes the application of the measure for The fixed date and also the government is discussing to remove three or six zeros to the bolivar.
"We are in a traumatic reconversion, it will be a conversion without anti-inflationary program, so that the new monetary cone (family of bills) will lose its validity in three months," he warns during the meeting. a meeting with foreign correspondents.
The government plans to launch the second 10-year currency conversion, which is happening in the midst of a monthly inflation that has exceeded 120% in June, according to studies by the National Assembly (Congress).
Inflation accompanied a sustained depreciation of the national currency, which the black market reached a record 3,500,000 bolivars per dollar, in addition to a shortage of paper -change.
Guerra says the government must negotiate the printing and transfer of new banknotes with several international houses, at an estimated cost of $ 300 million
He added that the current family of bills (1,000, 2,000 , 5,000, 10,000, 50,000 and 100,000 bolivars fuertes) came into force in January. or 2017 and has lost value because of the hyperinflationary advance.
Banks still do not receive banknotes
According to him, the government has to replace 4,200 million pieces and until now the banks have not received the new notes. 19659004] This is why it is difficult for the measure to come into effect on August 4 and indicates that it may be postponed.
In the previous reconversion, carried out in 2008, three zeros were eliminated from the bolivar, which was transformed into a strong bolivar In the new, three more zeros will be eliminated, in order to convert it into a sovereign bolivar
The 2008 has been done to facilitate daily transactions, in the middle of an inflation rate of about 30 percent per annum. Now, before the hyperinflation that the country is living, three more zeros will be eliminated, but without the announcement of an anti-inflationary plan that will accompany the measure.
Maduro announced in March the new conversion in a period of two months, to which the bankers responded that they needed more time to adapt their systems, so it was postponed to the month of April. 39; August.
"Without anti-inflationary program, if the measure is applied to the date, the new projects will lose their meaning in November.I think the government is in a dilemma, it does not know what to do," said Guerra.
In Washington, the director of the Western Hemisphere Department, Alejandro Werner, warned that Venezuela could close in 2018 with a million percent.
"The situation in Venezuela is similar to that of Germany in 1923 or Zimbabwe in the late 2000s."
The latest IMF forecast of Venezuelan inflation for 2018, announced in April C was 13,000 percent. At that time, Werner himself described the crisis in Venezuela as one of the most important in the history of the modern economy.
The IMF estimates that the Maduro government will continue to suffer large budget deficits financed "entirely" by an expansion of the monetary base, which will continue to fuel the acceleration of inflation, said Werner.
DPA / Sumarium
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