Over 1,000,000 % (one million percent) inflation this year, so far
In the face of over a million citizens fleeing the troubled nation, Maduro announced a series of major economic changes over the weekend in another desperate attempt to prop up the country’s flailing economy.
Some of the important changes, which were to take effect Monday, are:
- Devalue Venezuela’s currency, the bolívar, by a huge amount of 95%. The new currency will be renamed the “sovereign bolívar.”
- Instead of an exchange rate of 250,000 bolívars per US dollar, it will increase to another huge value of about 6 million.
- According to Bloomberg, the new bolívar will be pegged to the government’s cryptocurrency called the petro.
- The sovereign bolívar will move in line with changes in the petro, which is linked to movements in oil prices.
- The petro is valued by the Venezuelan government at about $60, or 3,600 sovereign bolívars.
- To make things more complicated, the new sovereign dollar will also be redenominated, which will remove about five zeros from its unit measurement.
- At the same time, Maduro also announced another huge 3,000% increase to the minimum wage.
- So in the new redenominated currency, a person on the minimum wage will receive about 1,800 sovereign bolívars a month, instead of 1.8 million.
- The new minimum wage is equivalent of about $30 a month, instead of $ 2.00 per month.
The government will also end some gasoline subsidies and raise the value added tax (similar to the GST in Australia) by about 4% — moves it says will save about $10 billion a year.
The weekend announcements are the latest round of unorthodox measures used by Venezuelan authorities to stabilize the economy and put a lid on rampant inflation.