Venezuela held October 1 denomination bolivar to stop the rampant rise in prices. According to Al Jazeera, the national currency, “write off” six zeros, and the old notes in denominations of one million bolivars will be exchanged for a new one with the face value of the bolivar.
Earlier the bill with the highest nominal value was one million bolivars (he was worth 17.48 rubles at the exchange rate as of September 30). Now largest banknote is worth 100 bolivars.
The plans of the Central Bank to carry out denomination became known on August 5. Then the regulator stated that the rate will not change, and the change will simplify the accounting par value and other financial transactions, which are often complicated by the large number of zeros. For example, as of October 1, to buy a loaf of bread was required seven bills in denominations of one million bolivars.
Because of the hyperinflation banks have restricted the amount of cash that individuals can shoot during the day, and many Venezuelans have moved to the US Dollar or non-cash payment methods. For this reason, the central bank announced its intention to enter into the digital revolution Bolivar.
Over the years, the national currency depreciated by almost – for one only in 2021 it has lost 73 percent of its value. The country’s central bank stopped publishing statistics on inflation, however, according to the International Monetary Fund (IMF) by the end of 2021 it will amount to 5,500 percent.
The Venezuelan teacher Marelis Guerrero noticed that people receive their wages in millions of bolivars, but these money almost worthless. “We earn two weeks less than three dollars”, – admitted resident of Caracas, capital of the country
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This is the third case of redenomination. In 2008, under President Hugo Chavez, Bolivar lost three zeros, and in 2018 the current head of state Nicolas Maduro removed five zeros.
Venezuela for a long time is going through a severe economic crisis. Since 2013, GDP fell by 80 percent. According to the Catholic University Andres Bello, in the years 2020-2021 three of the four people in the country were below the poverty line. The situation is exacerbated by the pandemic COVID-19, to deal with which Venezuela receives humanitarian aid.