Venezuela now has two new monetary units, the sovereign bolivar and the petro, in the context of the monetary conversion that comes into force today and on the basis of which President Nicolás Maduro has proclaimed a holiday.
The sovereign bolívar (BS.S, or VES official international acronym) comes from the reconversion announced on Friday by President Nicolás Maduro and which eliminates five zeros for the current strong bolivar (BSF) and includes paper money of eight different values: two, five , ten, 20, 50, 100, 200 and 500 Bs.S) and two metal coins (50 cents and 1 Bs.S).
On the other hand, the crypto Venezuelan petrovaluta becomes compulsory accounting for all operations of the state-owned Petróleos de Venezuela SA and the oil sector, and the value of which is 3,600 sovereign bolivares.
The monthly minimum wage and product prices of Venezuelans are now presented on the basis of the value of petro, which in turn is indexed to the value of the international price of a barrel of crude oil and is based on the reserves of various natural resources, such as oil , gold, diamonds and natural gas.
With the currency conversion now in effect, Venezuela has carried out two operations of this type over the last 20 years, whereby the banknotes in circulation were replaced or increased, in some cases with the introduction of coins.
Reduced by late socialist leader Hugo Chávez – President between 1999 and 2013 – the first reconversion occurred in January 2008, when the Bolivar lost three zeros and created the strong bolivar.
The second reconversion was announced by Nicolás Maduro on March 22 last with the application date until June 4, 2018.
The conversion, which would initially eliminate only three zeros for the strong bolivar, has been postponed and is now finally in effect with the introduction of the sovereign bolivar and the deduction of five zeros in the currencies up to now.
The conversion of the currency is part of a disputed new economic package, which according to the government will solve the crisis in the country and that is to raise the Venezuelan minimum wage, a VAT increase of 12% to 16%, but exempt from products and medicines essential.
The changes also include imposing a tax on large transactions, increasing fuel prices to international levels, a new system for controlling the exchange rate and a program for "austerity and zero budget deficit" whose details have yet to be published. .
The International Monetary Fund predicts that Venezuela 2018 will end with a cumulative annual inflation of 1,000,000%.
Lack of security, low wages, high prices and shortages of products and medicines have resulted in tens of thousands of Venezuelans emigrating to other countries, notably neighboring Brazil and Colombia, but also Peru and Ecuador.