Citizens frustrated as inflation-plagued nation puts out new bolivar with fewer zeros
CARACAS, Venezuela — Saul Jimenez just wanted to buy bread from his neighborhood bakery in Venezuela’s capital on Monday. It did not go well.
Banks and most other businesses were closed for the day as Venezuela launched a series of dramatic economic reforms, beginning with the release of currency with five fewer zeros in a bid to tame soaring inflation.
Rampant inflation means it would take a fistful of bills to pay for a loaf of bread, so many Venezuelans like Jimenez rely on bank cards.
But with banks closed to reset their systems for the change, Jimenez’s cards wouldn’t work — in a scene that played out across Caracas.
“It wasn’t just mine, but others’ also didn’t work,” said the attorney, who left the bakery empty-handed and frustrated. “Nei-
ther the debit card nor credit card.”
The currency conversion is among the less controversial parts of President Nicolas Maduro’s economic plan. He’ll next hike the minimum wage by more than 3,000 percent and raise gasoline prices — now less than a penny to fill up — to international levels.
Critics say the package of measures will only make the economic crisis worse.
Opposition leaders are seizing on tension among residents, calling for a nationwide strike and protest Tuesday. They hope to draw masses into the streets against Maduro’s socialist ruling party — something they’ve failed to do in over a year.
The closed banks spent Monday preparing to release the “sovereign bolivar,” the new currency printed with five fewer zeroes. Maduro’s government says it will raise gasoline prices in late September to curtail rampant smuggling across borders. The dramatically higher minimum wage will go into effect starting Sept. 1.
Economists say the package of measures is likely to accelerate hyperinflation rather than address its core economic troubles, like oil production plunging to levels last seen in 1947.
Venezuela was once among Latin America’s most prosperous nations, holding the world’s largest proven oil reserves, but a recent fall in oil prices accompanied by corruption and mismanagement under two decades of socialist rule have left the economy in a historic economic and political crisis.
Inflation this year could top 1 million percent, according to economists at the International Monetary Fund.