The Venezuelan economy has been almost completely dollarized in recent months. Most of the transactions were in US currencies, while inflation was over 250% from January to May.
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Bolivar will avoid a few zeros. The country’s central bank said on Thursday (August 5) that Venezuela’s currency would lose six zeros on October 1 due to extreme inflation. From October 1, the digital bolivar will take effect when a new currency scale is applied that removes six zeros from the national currency., Explains the Central Bank.
The Venezuelan economy has been almost completely dollarized in recent months. Most of the transactions were in US currencies, while inflation was over 250% from January to May. High inflation reached 400,000% in 2018, about 10,000% in 2019 and 3,000% in 2020. Venezuela, once a rich oil country, has seen its GDP fall by 80% since 2013, with 65% of families living in poverty.
In 13 years, Bolivar will lose 14 zeros, a sign of the government’s continued devaluation. Former President Hugo Chavez (1999-2013) eliminated three zeros in 2008. His successor and current president, Nicolas Maduro, did so in August 2018 by removing five zeros.
The country will print new banknotes with this move as it has almost disappeared from circulation in the country. Most non-dollar exchanges are digital (card payments, wire transfers or bank transfers). This decision is aimed at “Facilitate” The use of money, it brings back “Simple Cash Scale”, Central Bank continues.
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