A town in the crisis-stricken country of Venezuela has begun issuing its own currency to combat the ludicrous levels of hyperinflation causing general cash shortages.
Authorities in the town of Elorza in western Venezuela have introduced their own currency, known as the “Elorza,” to make it easier for people to trade during the town’s festivities, which started on Monday.
The new notes feature the image of local independence leader Jose Andres Elorza, and are available to residents through bank transfers or debit card payments.
“People don’t have bolivares to spend, that’s why we have created bills of two denominations,” said the town’s mayor Solfreddy Solórzano, a member of Nicolás Maduro’s ruling socialist party.
Solórzano added that 2 billion bolivares had already been exchanged, equivalent to just under $9000. Although traders charge an eight percent commission on all transactions, any unused Elorzas can be exchanged back for Bolivares.
As well as helping to facilitate spending for traders, the initiative will also help ease the pressure on customers carrying kilos worth of currency to buy simple products such as food and other essentials.
Last December, a community group in one of Caracas’s poorest hilltop slums also launched its own currency known as the “panal,” which could be used in exchange for rice.
Ironically, the notes feature the face of the late socialist leader Hugo Chávez’s, whose reckless spending policies and widespread use of price controls remain a major factor behind the country’s current predicament.
Hyperinflation has been one of the driving factors behind Venezuela’s current economic crisis, rendering the country’s bolivar currency practically worthless and leaving millions of people in abject poverty.
According to figures released by the opposition-controlled national assembly, prices rose by 6000 percent in the year ending February 2018,
Despite the government raising the minimum wage five times in the past year, skyrocketing inflation has driven the monthly minimum wage down to under two dollars a month.
To keep up with inflation, the government has also repeatedly issued higher denomination banknotes. However, even the maximum denomination of 100,000 bolivares is worth just 44 cents.
In the last month alone, the Central Bank of Venezuela has increased the total amount of currency in circulation by over 50 percent, although cash printing still fails to keep up with levels of demand.