Venezuelan government embarks on economic reforms

Venezuelan President Nicolás Maduro

The Venezuelan government has introduced series of reforms that would help stabilise its economy.

Faced with rampaging hyperinflation, the South American country lopped five zeros off its currency: 1 million “strong’’ bolivars became 10 “sovereign’’ bolivars as the week started.

The sovereign bolivar is now also pegged to the new petro cryptocurrency.

According to the International Monetary Fund, Venezuela’s inflation rate will reach 1 million per cent this year, while economic output could shrink by as much as 18 per cent.

The reforms had been due to take place on August 4, but banks asked for more time to adapt to it.

Critics say that although the minimum wage was increased from 5 million strong bolivars to 31 dollars on August 13, this move could in fact fuel inflation further

President Nicolas Maduro of Venezuela had recently admitted that the official exchange rate massively overvalued the bolivar.

Peace PIAK