CARACAS: Venezuela unveiled new banknotes on Friday to once again slash zeroes off its currency, battered by runaway inflation that has compounded the country’s economic collapse and left many struggling to put food on the table.
The national economy has shrunk by 80 per cent since 2013 as the oil price crashed and output dwindled during decades of under-investment, US sanctions, and mismanagement by successive socialist governments.
The latest devaluation is the third in 13 years and gives Venezuela the dubious distinction of becoming the South American country to have removed the most zeroes from its currency.
Seven one-million bolivar notes — the highest denomination and very hard to come by — were needed to pay in cash for one loaf of bread in the once-rich oil-producing nation, now battling the world’s highest inflation rate.
Consumers have struggled to make payment for even the most basic goods or services and public sector workers have found themselves receiving salaries paid in millions of bolivars that are effectively worth nothing.
“We earn, fortnightly, less than three dollars,” teacher Marelys Guerrero, 43, said.
Rent for an apartment in a modest suburb of the capital starts from about $150, while a basket of basic groceries for a family of five costs about $220.
Most payments in bolivars are done by debit card or bank transfer, but seventy per cent of transactions are now conducted in US dollars, according to private sector estimates, and prices on many shop shelves are displayed in the US currency, to keep things simpler. The bolivar lost three zeros in 2008 under now-deceased President Hugo Chavez, whose successor Nicolas Maduro eliminated five more in 2018. With Friday’s change, a million bolivars will overnight become one — still the equivalent of about 25 US cents.
In Venezuela’s border regions, besides the dollar, it is common to also pay for goods in Colombian pesos or Brazilian reais, and even grams of gold. In the rest of the country, cash is used almost exclusively for purchasing public transport tickets, but even this presents a headache as notes are scarce and can only be obtained by standing in long queues at the bank.
“I’ll buy your dollar!” — children with thick wads of bolivar bills yell at buses that, along with bus stops, have become informal currency exchange offices. — AFP
