Because of the hyperinflation process, as of next October the Venezuelan currency, Bolivar, will lose six zeroes, the central bank announced on Thursday, This is the third time in thirteen years that monetary officials in the country appeal to eliminating ciphers.
The first time was under deceased president Hugo Chavez, in 2008, when the first three zeroes were eliminated. The current nominal leader of the country Nicolas Maduro, in 2018 erased five zeroes, and another six in October, thus totaling 14, since the Chavistas are managing what was once one of Latin America's richest countries.
The digital Bolivar means that beginning October all transactions will be divided by a million, pointed out the central bank, making the monetary scale much simpler. Besides new bills of 1,10, 20, 50 and 100 Bolivar and a one Bolivar coin, will again circulate.
This is a direct consequence of hyperinflation which during the first five months of the year reached 264,8%, while in the twelve months of 2020, it was 2.959,8%, and in 2019, 9.585,5%, all of them official figures from the Venezuelan central bank. As a consequence of the soaring prices in thousands and millions, there is a growing market for US dollars and greenback prices' denomination in commerce and business in Venezuela.
However the opposition Venezuelan Finance Observatory, OVF, disagrees with the official inflation and underlines that prices in six months increased 333% and 2.616,% in the last twelve months.
Although the 'digital' has been added to the new Bolivar, with the purpose that all transactions are digitalized (only public transport is not included) reactions are skeptical. For local economists it's no miracle decision. We can't expect monetary miracles unless economic measures are announced to combat inflation and ensure GDP growth. Venezuela has been officially in sustained recession for eight years running with no future hope light at the end of the tunnel.