Venezuela’s decision to abolish one million bolivar notes is going to be another experiment of currency changes implemented by the country.
Venezuela has announced that it is changing the local currency from one million to just one bolivar. This change made in Bolivar will come into effect from October 1. Under the new currency system, the current price of 10 lakh bolivars will become one bolivar. The currency of the South American country, which is battling with unbridled inflation, has been declining for years. Venezuela is trying to normalize the situation through a cryptocurrency revolution based on the digital coin ‘reserve’. The digital currency has been in circulation since March 2020. Its purpose is to revive the economy of the country.
The decision to abolish one million bolivar notes will be another experiment of currency changes implemented by the country. A new 100 bolivar note will be the largest note after the new changes. Communications Minister Freddy Nanez tweeted that the country’s central bank will issue new notes with denominations of 5, 10, 20, 50 and 100 bolivar and one bolivar coin. These changes will come into effect with the release of new notes from October 1. Venezuela has entered its sixth year of economic recession. Due to the rising value of the US dollar, food prices have skyrocketed and millions of people have become poor.
There has already been an experiment to reduce zero
In May this year, Venezuelan consumer prices rose by 28.5% and the annual inflation rate exceeded 2,719%. In addition, Venezuela’s monthly minimum wage stood at three dollars. The fact is that two similar changes were made in the last decade, but it has done little to change the economic situation in Venezuela. This is the reason that this time also there is doubt among the people about the change in the notes. In 2008, former President Hugo Chávez decided to remove the three cumin seeds from Bolivar. His successor Nicolas Maduro removed the five-zero notes in 2018.
The cost of five liters of water is 74 lakh bolivar
Venezuela’s central bank will print notes, including one bolivar coin and new notes ranging from five to 100. The government has asked citizens to use digital dialects as much as possible. At present there is a shortage of one million bolivar in the market. Due to rising inflation, 7.4 million bolivar is needed to buy a five-liter bottle of water, which is equal to $1.84. This can be gauged from the deteriorating economic condition of Venezuela.
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