September 16, 2021

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High inflation — Venezuela will remove six zeros from its currency

The Venezuelan economy has been almost completely dollarized in recent months. Most transactions are made in US currency, while inflation was more than 250% between January and May.

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Bolivar will get rid of a few zeros. Venezuela’s currency will depreciate as it loses six zeros on October 1, the country’s central bank said on Thursday (August 5). From October 1, Digital Bolivar will come into effect when a new currency is used that removes six zeros from the national currency., Explains the central bank.

The Venezuelan economy has been almost completely dollarized in recent months. Most transactions are made in US currency, while inflation was more than 250% between January and May. High inflation reached 400,000% in 2018, nearly 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 continued devaluation against the government. Former President Hugo Chavez (1999-2013) removed three zeros in 2008. His successor and current president, Nicolas Maduro, did the same by removing five zeros in August 2018.

As these have almost disappeared from circulation in the country, the country will print new banknotes with this move. Most transactions that are not made in dollars are done digitally (card payments, wire transfers or bank transfers). This result is intentional “Facility” The use of money, brings it back “Simple Cash Amount”, The central bank continues.

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