Venezuela has dealt with record levels of inflation for several years. It has been such a significant problem in this South American nation that the year-over-year rate from 2020 to 2021 reached 1743%.
That means a minimum wage salary in the country right now has a value of about $2.50 per month. Most retailers are accepting American currency instead because it delivers better results for them.
In an effort to curb this problem, the Venezuelan government announced its second monetary overhaul in three years. It’s removing six zeros from the bolivar currency to simplify the accounting.
In 2018, the Government Removed Five Zeros from Its Currency
It’s the third time that Venezuela has removed multiple zeros from their currency in a bid to stop inflation. With the six eliminated this year, that means a total of 14 will have been taken away in the past decade.
Venezuela used to be a prosperous OPEC nation. The socialist government blames American sanctions for the problems, but it is more about interventionist macroeconomics and poorly planned social spending at a time when oil prices tanked.
The actual value remains the same with the removal of six zeros. Since most shoppers use dollars in cash for purposes, most people say they won’t be affected by the change.
Until the economic imbalances of the country get fixed, this action might need to be retaken soon. The acute problems and this single change have virtually no impact on the nation’s macroeconomics. Keep an eye on the top news sites for updates.