Venezuela issued a new currency on Monday as the Maduro government attempts to rein in the wild hyperinflation rate that is currently taking over the country's economy. From major business establishments to the common buyer, all expressed dismay and confusion as new banknotes begin to roll out.
According to CNN, this latest move from the Maduro administration is part of its recovery measures to hold-off the ever increasing inflation rate which, as warned by the International Monetary Fund (IMF) could balloon to one million percent before this year ends.
The new "Bolivar Soberano" currency is worth 100,000 of the "old" Bolivares, the news agency specified.
As further explained over at BBC, a lot of major changes are implemented in the new money which could potentially create confusion, particularly in the average consumer's end. Cutting off five zeroes off the old Bolivar, a cup of coffee which originally sells at 2.5 million strong bolivares in Caracas will now cost 25 sovereign bolivars.
President Maduro, in his official Twitter account, said that the new monetary system being adopted is a "revolutionary formula," a strategy which will take effect right down to the very core of the Venezuelan society.
Moreover, the new Bolivar is deemed by the current government as a way to completely eradicate the "dollarized" pricing model the country has previously implemented.
In his subsequent statement, the Venezuelan leader calls on the citizens to "defend - conscientiously - the adjustment of the prices on the street."
Upon its nationwide release on Tuesday, there were reports saying that banks are currently restricting the amount that can be withdrawn to 10 sovereign bolivars per day only.
According to the New York Times, the present adverse economic situation in Venezuela can be felt right off the streets. Just this week, most of the shops in Caracas and all over the country were closed as businesses tried to wrap their heads around the major monetary adjustment. Prices have to be reset in lieu of the new currency.
The buyers, in their case, were reportedly struggling to make the currency conversion even with the use of an app intended for the said purpose.
Political analysts are now crossing their eyebrows over what Maduro and his administration have been trying to pull off in Venezuela.
Daniel Osorio, the Andean Capital Advisors President, recently sat with CNBC to spill out his opinions. According to him, the new Bolivar money carries no "international support" and has been largely considered as a "scam."
This major overhaul, as Osorio added, is more confusing than being useful, and could plunge the country into a "barter" basis economy.
