Daily Management Review

New Sovereign Bolivar Currency Brings Venezuela To A Halt


08/22/2018




New Sovereign Bolivar Currency Brings Venezuela To A Halt
Dealing with the newly introduced currency is proving to be quite difficult for Venezuelans as the country virtually came to a standstill on Tuesday.
 
Many workers stayed back at their homes while thousands of businesses remained closed as they tried to adapt to the "sovereign bolivar".
 
the new banknotes were launched on Monday by President Nicolás Maduro and revaluated and renamed the old bolivar currency.
 
While the government claims that this measure would help in managing the skyrocketing inflation but critics say that this will only aggravate the already delicate situation. The new notes were put into circulat6ion from Tuesday.
 
Monday was declared a bank holiday by President Maduro.
 
There were very few workers in most of the capital city of Caracas despite being a working day. W2hile some of the opposition parties had called for a strike, but most stayed back home because of uncertainty emerging out of concerns about the outcome of the new currency and how it could be of any help of the distressed economy to get better.
 
This resulted in Venezuela virtually turning out into a paralyzed country on Tuesday according to media reports. 
 
Historically, a situation like the one of Tuesday turn\s out to be very volatile.
 
While there has not been any reports of any protest or violence of any significance, the government deployed more security forces throughout the country while the new currency was rolled out.
 
The spiralling hyper-inflation would be tackled and the economy would be saved by the new currency, President Nicolás Maduro has said.
 
Five zeroes from the old bolivar were wiped off in the new currency which means that if a cup of coffee was valued at worth 2.5m strong bolivars last month, it would now cost 25 sovereign bolivars.
 
Reports said that people were only allowed to withdraw 10 sovereign bolivars on Tuesday from ATMs.
 
While the country was shaken up by the introduction of the new bolivar, the northern coastal region of the country was shaken up by a powerful earthquake. The tremors were strongly felt even in the capital city of Caracas and a number of buildings had to be evacuated.
 
The magnitude of the earthquake was reported to be a 7 according to US seismologists and had its epicenter in the east of Venezuela. The Venezuelan authorities recorded a magnitude 6.3 quake.
 
Earlier in the day, there was confusion by the new currency and even the country’s black market in dollars was frozen.
 
Accompanying the ne4w bolivar, the government also announced a number of other important economic changes which included a 34 time increase in the minimum wage compared to the previous level from 1 September, raising of VAT reduction of fuel subsidies.
 
"Anchoring the bolivar to the petro is anchoring it to nothing," economist Luis Vicente León told AFP news agency.
 
(Source:www.bbc.com)






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