The Venezuelan President Nicholas Maduro announced plans for denomination of the national currency to cope with heavy inflation. The plans include removing of the three zeros from the value of Venezuelan bolívar. The measure will come into force in early June, attempting to ease the inflation pressure over the country and the payments.
Venezuela suffers from hyperinflation and a severe economic crisis. There is a shortage of food products and medicines in the country.
The announced denomination illustrates the collapse of the Venezuelan bolívar, which fell by 99.99% against the US dollar on the black market since Maduro came to power in April 2013.
The president, who fights for re-election this year, however, presented the measure as a positive development aimed at defending Venezuela from currency speculators and the US-led “economic war” against the country.
The critics said the currency measure was no panacea for Venezuela’s economic mess and just a psychological ploy to make Venezuelans forget the extent of the hyperinflation. While the move sounds like a currency revaluation, economists consider it a currency re-denomination instead, as the country is not changing the value of its official exchange rate. Venezuelans will not need to turn in the currency held in their wallets, but all new currency printed or minted will be in the new denominations.