Central Bank of Venezuela on its website announced the denomination of the national currency scheduled for October 1 of the current year. With the new sovereign Bolivar, there are six zeros, that is, a million old one will give a new banknote.
The reason for such a decision was hyperinflation, in which Venezuela has been living for many years. Due to the large number of zeros, accounting and other expenses were significantly complicated.
The country, which is one of the main debtors of Russia (as of 2019, Caracas has had more than a billion dollars), also decided to introduce a digital currency in circulation, which will participate in circulation to equal with ordinary money. It is assumed that digital Bolivar will reduce the operating costs and reduce transaction time to a few seconds.
The denomination message is called historical variation necessary at a time when the country begins to restore the economy after the crisis. In the problems, the regulator accused the West, conducting a tough attack on the state.
This is the second one, moreover, a larger denomination over the past three years. In 2018, five zeros were written off with a banknote, although at the time of the preparation of new money it was assumed that only four would have to write off. For six months, sovereign Bolivar depreciated ten time. In 2020, inflation in Venezuela approached 3000 percent.
Earlier, the Economist magazine in the next “Bigmak index” called Bolivar the most revalued currency of the world, in terms of the cost of the burger, it should be 47.7 percent cheaper. The ruble, in turn, became one of the most undervalued.