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Central Bank: Venezuela devalues bolivar by 96 percent under new rate

World News
Wed, 22 Aug 2018
AFP
1 of 2

Caracas: Venezuela has devalued the bolivar by 96 percent under a new exchange rate announced by the central bank on Tuesday.

The announcement comes a day after new banknotes stripped of five zeroes entered circulation as part of a radical plan by President Nicolas Maduro to curb hyperinflation, though business leaders criticised the move as counterproductive.

The Central Bank of Venezuela set the rate at 68.65 of the new "sovereign bolivars" to the euro, equivalent to around 60 bolivars per dollar.

The previous rate was equivalent to some 2.48 sovereign bolivars to the dollar.

Expressed in the previous "strong bolivar" currency in effect until Monday, it amounts to a hike from 248,210 to 6,000,000 to the dollar.

After days of nervousness over the conversion to the new currency, businesses in the capital Caracas returned to normal on Tuesday after a public holiday on Monday.

From early morning, long lines formed at ATMs that dispensed the new bills, though withdrawals were limited to 10 bolivars each, not enough to buy even a coffee in a country wracked by inflation.

Some businesses remained shut in order to cope with the currency adjustments, while others joined a 24-hour strike called by the three main opposition parties to reject Maduro's policies.

"The banks are working and giving cash. I've been able to make transfers and payments, and everything is normal," Cesar Aguirre, a 38-year-old accountant, told AFP after withdrawing money.

However, some shoppers voiced fears of a rise in prices.

"I was able to use my debit card, but everything is still expensive. Everything has increased, I bought a sandwich in Petare and it cost two million" of the old bolivars, said housewife Carmen Maldonado.

Some 2.2 million Venezuelans have fled the crippling economic and social crisis that developed under Maduro's rule, with the International Monetary Fund projecting inflation to reach a staggering one million percent by the end of the year.

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