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A New Currency in Venezuela

Jam3000000amFri, 23 Mar 2007 10:25:52 +000007 23, 2007

Another striking change in the policies of Hugo Chavez occurred recently when he decided to introduce a new currency, or rather, take a few zeroes off the old one and bringing back some old coins.  What should be interesting to watch is how the new prices affect the economy and how confusing things might be. Furthermore, it will be important to see how long it takes for the old currency to come off the market and the new currency to replace it.  I believe it will be a long process and fairly difficult because of the status of the country, and the hurting economy.  Currently, Venezuela has the highest inflation rate in South America which has led Hugo Chavez to make these drastic changes in the economy.  Chavez believes that renaming the currency and the re-denomination will bring the economy back to the prosperity from decades ago.  Also, Chavez is bringing back a 12.5 cent coin to mimic one of the past involving Simon Bolivar.  It seems like this move by Chavez is just one to draw more nationalism from the Venezuelan.

 

 

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One comment

  1. […] I Used to be a Millionaire This is a pretty standard ploy for dealing with inflation. Turkey dropped six zeroes from its currency and turned all the million lira bills into ones. However, the usual anti-inflationary policies generally involve very un-socialist adjustments. A New Currency in Venezuela […]



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