In a desperate attempt to clear the economic crisis, Venezuela’s President Nicolas Maduro ordered a re-denomination of the ailing bolivar currency on Thursday, by knocking three zeroes off.
The measure to divide the so-called bolivar fuerte – or “strong bolivar” – currency by 1,000 would take effect from June 4, the socialist leader said. It would not have any impact on the bolivar’s value.
The move illustrates the collapse of the bolivar, which has fallen 99.99 percent against the U.S. dollar on the black market since Maduro came to power in April 2013. A $100 purchase of bolivars then would now be worth just a single U.S. cent.
But Maduro, 55, presented the move as a positive development intended to protect Venezuela against currency speculators and a U.S.-led “economic war” against the OPEC member.
Critics said the currency measure was no panacea for Venezuela’s economic mess and just a psychological ploy to make Venezuelans forget the extent of the hyperinflation.
While the move sounds like a currency revaluation, economists consider it a currency re-denomination as the country is not changing the value of its official exchange rate.
Venezuelans will not need to turn in the currency now in their wallets but all new currency printed or minted will be in the new denominations.