Venezuelan dictator Nicolás Maduro announced on Tuesday that he will knock three zeros off their currency and create a new monetary system known as the “sovereign bolivar.”
“I have decided to remove three zeroes from our currency and take all current currency out of circulation and instead implement a new currency with three fewer zeroes,” Maduro declared on national television, adding that the move “would allow people to complete their commercial and monetary activities.”
The socialist dictator added that the measure was an attempt to defend Venezuelan currency against the creeping dollarization of their economy.
“For the month of June we will demonetize the current monetary cone for the new initiative: the sovereign bolivar,” he continued. “We are not going to dollarize our economy; Let’s defend our Bolivar!”
The move, which will take effect on June 4th, will allow the division of the currency by 1000 and replace the current 10,000, 20,000, 50,000 and 100,000 notes with smaller denominations.
— teleSUR TV (@teleSURtv) March 22, 2018
Such a measure is indicative of the unprecedented levels of inflation experienced by the bolivar currency, which has lost over 99.99 percent of its value since 2010 as a result of socialist economic policies that created an inefficient, nationalized economy.
At current exchange rates, one U.S. dollar is equivalent to 235,000 bolivares, with inflation rising by 2700 percent in 2017 alone, leading to the brutal collapse of people’s savings and livelihoods that has left large swathes of the population in need of humanitarian assistance.
Maduro has tried to solve the inflation issue by repeatedly raising the country’s minimum wage multiple times, as well as releasing higher denomination bank notes to prevent people from carrying kilos worth of banknotes.
However, such methods have only pushed inflation higher so that the country’s monthly minimum wage is now worth under two dollars a month, plunging the country into the worst economic and humanitarian crisis in its history.
Despite the regime’s hatred of the United States, increasing numbers of Venezuelan merchants are now only accepting in U.S. dollars, raising speculation that the country could revert to the dollar in a post-Maduro economy.
As well as a crumbling domestic economy, the Maduro regime is also unable to pay its enormous debt burden to countries such as Russia and China.
In recent months, the government has attempted to launch a national cryptocurrency known as the “petro” backed by the country’s extensive natural resources, although cryptoanalysts dispute whether the initiative will actually raise any money.