Venezuelan dictator Nicolás Maduro has removed five zeroes from the country’s bolivar currency amid inflation that is expected to reach one million percent by the end of the year.
The announcement comes two days after the International Monetary Fund predicted that Venezuela’s inflation would reach one million percent by the end of 2018. Maduro said the monetary conversion would spark “great revolutionary changes in the economy, which Venezuela demands.”
Such a measure is indicative of the unprecedented levels of inflation experienced by the bolivar currency, which has lost over 99.999 percent of its value since 2010 as a result of socialist economic policies started under Hugo Chávez that created a highly inefficient, nationalized economy.
At current exchange rates, one U.S. dollar is equivalent to 3.52 million bolivares, leading to a total collapse of people’s savings and livelihoods that has left large swathes of the population in desperate need of economic and humanitarian assistance.
Back in March, Maduro announced that the government would print money with three fewer zeros, although the plan was never carried out in full. He has also tried to solve the inflation crisis by repeatedly raising the country’s minimum wage, as well as releasing higher denomination bank notes to prevent people from thousands of banknotes to buy simple products.
However, such methods have only forced inflation higher so that the country’s monthly minimum wage is now worth under one dollar a month, while prices of basic products rise astronomically every day to keep up with changing currency prices.
Despite the regime’s open hostility towards the United States, increasing numbers of Venezuelan merchants are now only accepting in U.S. dollars, raising speculation that the country will be forced to revert to the dollar in a post-Maduro economy.
As well as his crumbling domestic economy, the Maduro regime is also unable to pay its enormous debt burden to countries such as Russia and China. Earlier this year, the regime launched its own national cryptocurrency known as the “petro” backed by the country’s extensive natural resources of oil and diamonds, although cryptoanalysts dispute over both the legality and effectiveness of such a measure.