The Venezuelan government is reducing its national currency by 6 zeros to combat high inflation and facilitate calculations.
According to Tasnim News Agency, quoted by Reuters, Venezuela, in its second financial transformation in the last 3 years, is reducing the Bolivar currency by 6 zeros in order to deal with the extremely high inflation in the country and to make calculations easier.
The purpose of this measure is to facilitate calculations in businesses and banks because the systems are no longer able to process large numbers. Annual inflation in Venezuela has reached 1743% and the minimum wage in this country is $ 2.50 per month.
But the Venezuelan people believe that this monetary change has not changed the situation and does not increase the purchasing power of the people. Venezuela is still short of water and gas.
In 2018, the government of Nicolas Maduro removed 5 zeros from the national currency due to high prices. A decade ago, Hugo Chاvez removed 3 zeros from the Bolivarian national currency in order to monopolize inflation, but failed to achieve his goal.
Once one of the richest countries in South America, OPEC has been suffering from the economic crisis for years, forcing millions of Venezuelans to emigrate.
Maduro’s socialist government blames US sanctions on the country’s economic woes, but critics blame the crisis on the government’s macroeconomic policies.
The widespread use of the US dollar for economic transactions in Venezuela is hampering the success of this new plan. The bolivar is rarely spent in cash on regular purchases in Venezuela. Economists believe that economic instability in Venezuela is very high and that these eliminated zeros will return soon.
