Venezuelan President Nicolas Maduro on Thursday ordered a redenomination of the ailing bolivar currency, knocking three zeros off amid hyperinflation and a crippling economic crisis.
The measure to divide the so-called bolivar fuerte — or “strong bolivar” — currency by 1,000 would take effect from June 4, Maduro said, adding that 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 US dollar on the black market since Maduro came to power in April 2013. A US$100 purchase of bolivars then would now be worth just US$0.01.
However, Maduro, 55, presented the move as a positive development intended to protect Venezuela against currency speculators and a US-led “economic war” against the OPEC member.
Critics said that 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 redenomination, 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 is to be in the new denominations.
Millions of Venezuelans are suffering from shortages of food and medicines during a fifth year of recession that critics blame on government incompetence and corruption, but which Maduro has said is due to Western hostility against him and the fall of oil prices.
“Venezuela has been victim of a brutal, economic war,” said Maduro, whose government has been the target of US, EU and Canadian sanctions over allegations of political and rights abuses.
Maduro made the announcement during an event shown live on TV, flanked by aides and bankers, to discuss Venezuela’s new cryptocurrency, the petro.
Venezuela’s government similarly redenominated its currency by knocking off three zeros a decade ago.
Prices in Venezuela rose 6,147 percent in the 12 months through last month, according to estimates by the country’s opposition-led National Assembly, which are broadly in line with independent economists’ figures.
Maduro is running for re-election on May 20 in a vote critics have said would be rigged to extend the president’s rule.
The opposition coalition is boycotting the vote, although Progressive Advance party presidential candidate Henri Falcon has broken ranks to run against Maduro.
Falcon has promised to dollarize Venezuela’s economy as a way to beat hyperinflation and regain investor confidence.
“Amid the biggest economic collapse in the history of Latin America, the government of Nicolas Maduro attempts to hide hyperinflation by knocking zeros off the currency,” said Francisco Rodriguez, a Venezuelan economist and Wall Street analyst working as Falcon’s chief economic adviser.
PATENTS: MediaTek Inc said it would not comment on ongoing legal cases, but does not expect the legal action by Huawei to affect its business operations Smartphone integrated chips designer MediaTek Inc (聯發科) on Friday said that a lawsuit filed by Chinese smartphone brand Huawei Technologies Co (華為) over alleged patent infringements would have little impact on its operations. In an announcement posted on the Taiwan Stock Exchange, MediaTek said that it would not comment on an ongoing legal case. However, the company said that Huawei’s legal action would have little impact on its operations. MediaTek’s statement came after China-based PRIP Research said on Thursday that Huawei filed a lawsuit with a Chinese district court claiming that MediaTek infringed on its patents. The infringement mentioned in the lawsuit likely involved
Taipei is today suspending work, classes and its US$2.4 trillion stock market as Typhoon Gaemi approaches Taiwan with strong winds and heavy rain. The nation is not conducting securities, currency or fixed income trading, statements from its stock and currency exchanges said. Authorities had yesterday issued a warning that the storm could affect people on land and canceled some ship crossings and domestic flights. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) expects its local chipmaking fabs to maintain normal production, the company said in an e-mailed statement. The main chipmaker for Apple Inc and Nvidia Corp said it has activated routine typhoon alert
GROWTH: TSMC increased its projected revenue growth for this year to more than 25 percent, citing stronger-than-expected demand for AI devices and smartphones The Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) yesterday raised its forecast for Taiwan’s GDP growth this year from 3.29 percent to 3.85 percent, as exports and private investment recovered faster than it predicted three months ago. The Taipei-based think tank also expects that Taiwan would see a 8.19 percent increase in exports this year, better than the 7.55 percent it projected in April, as US technology giants spent more money on artificial intelligence (AI) infrastructure and development. “There will be more AI servers going forward, but it remains to be seen if the momentum would extend to personal computers, smartphones and
Catastrophic computer outages caused by a software update from one company have once again exposed the dangers of global technological dependence on a handful of players, experts said on Friday. A flawed update sent out by the little-known security firm CrowdStrike Holdings Inc brought airlines, TV stations and myriad other aspects of daily life to a standstill. The outages affected companies or individuals that use CrowdStrike on the Microsoft Inc’s Windows platform. When they applied the update, the incompatible software crashed computers into a frozen state known as the “blue screen of death.” “Today CrowdStrike has become a household name, but not in