Venezuelan President Nicolas Maduro on Thursday ordered a redenomination of the ailing bolivar currency, knocking three zeros off amid hyperinflation and a crippling economic crisis.
The measure to divide the so-called bolivar fuerte — or “strong bolivar” — currency by 1,000 would take effect from June 4, Maduro said, adding that it would not have any impact on the bolivar’s value.
The move illustrates the collapse of the bolivar, which has fallen 99.99 percent against the US dollar on the black market since Maduro came to power in April 2013. A US$100 purchase of bolivars then would now be worth just US$0.01.
However, Maduro, 55, presented the move as a positive development intended to protect Venezuela against currency speculators and a US-led “economic war” against the OPEC member.
Critics said that the currency measure was no panacea for Venezuela’s economic mess and just a psychological ploy to make Venezuelans forget the extent of the hyperinflation.
While the move sounds like a currency revaluation, economists consider it a currency redenomination, as the country is not changing the value of its official exchange rate.
Venezuelans will not need to turn in the currency now in their wallets, but all new currency printed or minted is to be in the new denominations.
Millions of Venezuelans are suffering from shortages of food and medicines during a fifth year of recession that critics blame on government incompetence and corruption, but which Maduro has said is due to Western hostility against him and the fall of oil prices.
“Venezuela has been victim of a brutal, economic war,” said Maduro, whose government has been the target of US, EU and Canadian sanctions over allegations of political and rights abuses.
Maduro made the announcement during an event shown live on TV, flanked by aides and bankers, to discuss Venezuela’s new cryptocurrency, the petro.
Venezuela’s government similarly redenominated its currency by knocking off three zeros a decade ago.
Prices in Venezuela rose 6,147 percent in the 12 months through last month, according to estimates by the country’s opposition-led National Assembly, which are broadly in line with independent economists’ figures.
Maduro is running for re-election on May 20 in a vote critics have said would be rigged to extend the president’s rule.
The opposition coalition is boycotting the vote, although Progressive Advance party presidential candidate Henri Falcon has broken ranks to run against Maduro.
Falcon has promised to dollarize Venezuela’s economy as a way to beat hyperinflation and regain investor confidence.
“Amid the biggest economic collapse in the history of Latin America, the government of Nicolas Maduro attempts to hide hyperinflation by knocking zeros off the currency,” said Francisco Rodriguez, a Venezuelan economist and Wall Street analyst working as Falcon’s chief economic adviser.
KEEPING UP: The acquisition of a cleanroom in Taiwan would enable Micron to increase production in a market where demand continues to outpace supply, a Micron official said Micron Technology Inc has signed a letter of intent to buy a fabrication site in Taiwan from Powerchip Semiconductor Manufacturing Corp (力積電) for US$1.8 billion to expand its production of memory chips. Micron would take control of the P5 site in Miaoli County’s Tongluo Township (銅鑼) and plans to ramp up DRAM production in phases after the transaction closes in the second quarter, the company said in a statement on Saturday. The acquisition includes an existing 12 inch fab cleanroom of 27,871m2 and would further position Micron to address growing global demand for memory solutions, the company said. Micron expects the transaction to
Nvidia Corp’s GB300 platform is expected to account for 70 to 80 percent of global artificial intelligence (AI) server rack shipments this year, while adoption of its next-generation Vera Rubin 200 platform is to gradually gain momentum after the third quarter of the year, TrendForce Corp (集邦科技) said. Servers based on Nvidia’s GB300 chips entered mass production last quarter and they are expected to become the mainstay models for Taiwanese server manufacturers this year, Trendforce analyst Frank Kung (龔明德) said in an interview. This year is expected to be a breakout year for AI servers based on a variety of chips, as
Global semiconductor stocks advanced yesterday, as comments by Nvidia Corp chief executive officer Jensen Huang (黃仁勳) at Davos, Switzerland, helped reinforce investor enthusiasm for artificial intelligence (AI). Samsung Electronics Co gained as much as 5 percent to an all-time high, helping drive South Korea’s benchmark KOSPI above 5,000 for the first time. That came after the Philadelphia Semiconductor Index rose more than 3 percent to a fresh record on Wednesday, with a boost from Nvidia. The gains came amid broad risk-on trade after US President Donald Trump withdrew his threat of tariffs on some European nations over backing for Greenland. Huang further
Sweeping policy changes under US Secretary of Health and Human Services Robert F. Kennedy Jr are having a chilling effect on vaccine makers as anti-vaccine rhetoric has turned into concrete changes in inoculation schedules and recommendations, investors and executives said. The administration of US President Donald Trump has in the past year upended vaccine recommendations, with the country last month ending its longstanding guidance that all children receive inoculations against flu, hepatitis A and other diseases. The unprecedented changes have led to diminished vaccine usage, hurt the investment case for some biotechs, and created a drag that would likely dent revenues and
RSS