In an effort to stabilize his country’s floundering economy, Venezuela President Nicolas Maduro announced Friday that the central bank will remove five zeroes from the currency on August 20. In June, he said that three zeros would be removed on August 3.
Venezuela suffers from the world’s highest annual rate of inflation, estimated to be between 15,000 percent and 25,000 percent.
“I announce that the currency redenomination will start definitively on Aug. 20 and I am taking additional measures to stabilized the money supply,” Maduro said during a speech broadcast on national radio and television. “The Bolivar [Venezuela’s currency] will be anchored to the Petro to end the high incidence of inflation.”
The Petro is the oil-backed cryptocurrency launched by the government in February.
Maduro’s critics responded quickly that the new banknotes have yet to be printed and that the Petro has not been accepted by financial markets as a legitimate currency.
“Maduro says that anchoring the new Bolivar to the Petro will stop the inflation but the Petro has not even been accepted by cryptocurrency traders,” says former Venezuela finance minister Jorge Miller from Bogota, Colombia. “It’s like anchoring the Bolivar to thin air. I can only say, good luck to that.”