Just one day after Venezuela’s historic currency devaluation, which lopped off 5 zeros from the currency and prices while bizarrely pegging the “sovereign Bolivar” – the country’s latest currency incarnation – to the petro, an oil-backed cryptocurrency (which has been banned by the US Treasury), chaos has predictably returned to the country with the greatest petroleum deposits in the world…. and hyperinflation failed to depart for even one day.
That what Henrique Rosales discovered when he went to an ATM on Tuesday – the day after Venezuela’s historic currency transformation took place – to withdraw Venezuela’s new currency: he found it dispensed a maximum of 10 sovereign bolivars a day, the equivalent of 15 U.S. cents.
“This money is going to disappear out of my hands in no time,” said the 29-year-old waiter, who told the Wall Street Journal he hasn’t seen cash in five months. He hasn’t been able to pay for bus fare and walks several miles a day from his hilltop slum to the seafood eatery where he works.
“I’m realizing the government has no plan to get us out of this nightmare. What a disaster.”
Rosales’ reaction was predictable (we previewed the chaos that lay in store for the Latin American socialist paradise over the weekend): he is among the many Venezuelans swept by confusion and anger as the government of President Nicolás Maduro rolled out its latest economic overhaul as part of its struggle to keep up with the world’s greatest hyperinflation, surpassing even that of the Weimar Republic.
Maduro called the measures “a really impressive magical formula” intended to stabilize the economy, including a new, highly devalued currency as well as tax and wage increases.
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