As of 00:00 on Monday, a new currency comes into circulation in Venezuela, the sovereign bolivar (Bs.S), in circulation, the result of a controversial monetary conversion in which five zeros from the current strong bolivar were eliminated
The conversion is part of an economic package that the Venezuelan president Nicolás Maduro says to stabilize the economy of an oil-producing country officially in "a state of emergency and economic emergency" since 2016.
The Bolivar also includes simplified transactions and accounting data and includes paper money of different value: two, five, ten, 20, 50, 100, 200 and 500 Bs.) and two metal coins (50 cents and 1 Bs.)
On the other hand, the country will also have the crypto Venezuelan currency mandro, which the accounting unit will be obliged to use for all operations relating to the oil activity and whose value will be indexed to the water ard of the international price of a barrel of crude oil and will be based on the reserves of various natural resources such as oil, gold, diamonds and natural gas.
Maduro decreed that August 20,
The conversion is accompanied by a new salary system whose value will be based on 0.50 petro and which will increase almost 35 times the monthly minimum wages of Venezuelans, which has increased from 5, 19 Bs.S to
The reconversion and use of petro, which analysts associate with the application of a dual system such as in Cuba – with the Cuban peso only valid on the island and the convertible peso, which is valid for exchange for foreign currency is part of an economic package.
This package includes rising fuel prices to bring them in line with international values, a measure contested by the population. led the government to announce the granting of subsidies for the purchase of gasoline to those who pre-register and have the so-called "father's card" promoted by the United Socialist Party of Venezuela (PSUV), the ruling party.
there will also be a new exchange rate control system that will no longer be based on the US dollar, be indexed to the petro, and replace the legislation that has been in force since 2003.
The exchange of currencies is no longer
This change will determine the local price of the products, which are no longer linked to the bolivar to be placed by the executive power on the basis of the crypto Venezuelan currency
The government promises sobriety and zero deficit on the budget and increased VAT from 12% to 16%, freeing the mass consumer goods from the first necessity for the population, such as
Several Venezuelan economists have already expressed concern about the announced measures which, in their opinion, will contribute to the rise in the prices of food, beverages, medicines and materials for the agribusiness, and the large financial transactions will pay between 0 and 2% of inflation, in a country that already has hyperinflation and according to the International Monetary Fund 2018 ends with a cumulative annual increase of 1,000,000%
Economists are the agree that the economy is indexed to the international price of They agree that monetary reconversion and economic measures will cause consumer confusion in the coming days, particularly in the private and commercial sectors, and warn that they will not be recognized abroad.
there are factors that can lead to an "environment of aggressive devaluation" and to a phase of "more aggressive hipe" rinflation. "