Uncertainty after diffuse economic announcements in Venezuela

Venezuelans were embroiled in uncertainty following the confusing economic reforms announced by President Nicolás Maduro, whose experts say it is a mega-devaluation and the devastating hyperinflationary spiral will not stop.

Prior to the departure on Monday of new five-dollar bills less, Maduro formalized other measures by which he tries to extract the economy from the four years of recession and inflation stops, so that by 2018 the IMF comes to 1,000,000%.

"The coming days will be very confusing for both the private sector, especially the commercial sector, it is a chaotic scenario," said the director of the consultancy firm Ecoanalítica, Asdrúbal Oliveros.

Maduro announced Friday night that he would multiply the minimum wage by 34, anchoring it to the petro, cryptocurrency created by the socialist government to try to obtain liquidity.

According to the president, every petro would be worth about $ 60 based on the price of a barrel of Venezuelan oil. The basic salary is half petro, which corresponds to 1800 bolivars of the new monetary cone.

In today's bolivars, the minimum income would go from 5.2 million (less than a dollar to the black market, which dominates the economy) to 180 million (about $ 28).

This adjustment, of 3.464%, is the fifth of the year. Maduro has not indicated when it will take effect, but the office of the presidency has indicated on Twitter that it is in effect from Monday.

In Venezuela, the minimum income, which is not even enough to buy a kilo of meat, is diluted by the accelerated devaluation. and inflation.

"Everything will stay the same, the prices will continue to rise," Bruno Choy, manager of a street food stall, told AFP.

"Pure straw (lie)!" Protested Ángel Arias, a retiree 67.

Some people nervously shop for food as often as their bag allows, but many stores were closed on Saturday in Caracas. Long rows of vehicles formed for petrol stations.

– More inflation? –

The Minister of Communications, Jorge Rodriguez, described on Saturday as "hoaxes" the criticism of the economic plan of Maduro.

In the face of doubts about viability, Rodriguez assured at a press conference that the state has the means to "fully fund" the program.

Although he promised a rigorous program of "tax discipline", Maduro said that the state will take the "difference" of the pay rise for all "small and medium-sized industries of the country" for 90 days, without explaining how.

We must … definitively eliminate the issuance of non-organic money and support the issuance of money in the production of wealth, "he said, acknowledging for the first time the monetary financing to which analysts charge inflation.

Director of the Econometric firm, Henkel García, ask where the funds will come from, with a deficit close to 20% of GDP and without access to international financing. "A huge increase" in prices and monetary they are the basis, he predicts.

Emissions of unsupported money have skyrocketed with the collapse to half of oil production, which accounts for 96% of revenue 19659002] In power since 2013 and faced with large popular rejection, Maduro also announced that it will increase VAT for luxury goods from 12% to 16%, as well as other taxes.

– Macro devaluation – [19659002] Maduro has geratifice erd that there will be one fluctuating official rate within the tight exchange rate control with which the government monopolizes currencies since 2003. He did not say how much he will start.

However, by attaching each petro to 3600 sovereign bolivars, which will enter into force on Monday, and to assess it in 60 dollars at the same time, the resulting change would be 6 million current bolivars per dollar.

For Oliveros it is a "recognition of the black market", which qualifies Maduro as "criminal" and multiplies in those quotes by up to 30 official ones. According to the specialist, it represents a "macro-evaluation".

Rodriguez said that 300 exchange offices in hotels, airports and shopping centers will be opened to trade currencies, after repealing a law that penalizes these operations.

The government promises to fix the tariffs in three weekly auctions, which then go up to five.

– Gasolina and veremos –

As part of its economic program, Maduro extended a vehicle counting until August 30 so that people directly receive a subsidy for petrol via the "carnet" of the homeland ", electronic card for access to social programs.

The opposition considers that document as a "mechanism of blackmail and social control. "

Maduro has ratified that those who do not go to the census will pay petrol at" international prices "". So far, according to the president, 1,863,750 people and 2,424,286 vehicles have been registered on a fleet of 4.5 million units.

The government is still not issuing any new fuel tariffs, but Rodriguez assured Saturday that the new pricing system would be implemented in the last week of September.

Venezuela has the cheapest petrol in the world: with one dollar at the black market price more than six million liters are bought.

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