Venezuela Delays New Currency Rollout, Slashes More Zeroes

(Bloomberg) -- President Nicolas Maduro late Wednesday announced a two-week delay to a planned currency redenomination to Aug. 20, when Venezuela will lop five zeroes off the refurbished bolivar and also link it to the country’s Petro cryptocurrency.

By “anchoring” the Sovereign Bolivar, as the new currency will be called, the Petro will help stabilize the economy, Maduro said in a speech on state television.

Venezuela Delays New Currency Rollout, Slashes More Zeroes

The government’s goal is to “stabilize and change the country’s monetary life in a radical way,” Maduro said surrounded by his economic team. Venezuela needs an “economic revolution,” he said.

Since Maduro took power in 2013, the currency has become virtually worthless amid crashing oil prices and unchecked state spending. Acute shortages of anything from paper money to basic goods have added to the misery in Venezuela, where inflation is set to reach 1 million percent by year-end, according to the International Monetary Fund.

Venezuela Delays New Currency Rollout, Slashes More Zeroes

Maduro’s initial redenomination plan called for slashing three zeroes from the Strong Bolivar notes to be replaced with the Sovereign Bolivar. This new delay comes after Maduro postponed a planned June rollout until Aug. 4.

Maduro also signed a decree to assign the Orinoco Oil Belt’s Ayacucho 2 Block to the central bank as a way of bolstering its international reserves. The Ayacucho 2 block contains 29.3 billion barrels of oil, he said. Additionally, he sent a decree to the National Constituent Assembly for approval regarding changing the current law on foreign exchange crimes.

“Let’s restore the nation’s purchasing power and productivity,” Maduro said, calling on Venezuelans to support his economic moves. “Why not? What’s the problem. Continue as we are in the agony of the oil economy?”

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