Venezuela will introduce a new currency with six fewer zeros to replace its currency


Posted on 01 October 2021


For Illustration Purpose Only.

On October 1, Venezuela will introduce a new currency with six fewer zeros to replace its currency, which has been rendered almost worthless by years of the world's highest inflation. Until now, the biggest denomination was a 1 million bolivar bill, which was worth around a quarter as of September 30. The new currency has a maximum value of 100 bolivars, or about $25, until inflation eats away at that as well. The bolivar's million-to-one conversion is meant to simplify both cash transactions and accounting calculations in bolivars, which today require juggling nearly limitless strings of zeros. A two-liter bottle of Coke could cost more than 8 million bolivars under the old system, and many of those bills were rare, forcing customers to pay with a thick bundle of paper. Customers could withdraw a limit of 20 million bolivars in cash per day from banks, or less if the branch was short on cash. As a result, people have come to rely on the United States dollar and digital payment systems like Zelle and PayPal to make transactions. The majority of transactions are now conducted online, with more than 60% of those conducted in US dollars, according to Jose Guerra, an economics professor at the Central University of Venezuela. Mr. Guerra, a former adviser to an opposition presidential candidate, said Venezuelans have become accustomed to currency fluctuations and that more are likely to come until the government's policies change.


Key Points


  • On October 1, Venezuela will introduce a new currency with six fewer zeros to replace its currency, which has been rendered almost worthless by years of the world's highest inflation.

  • A two-liter bottle of Coke could cost more than 8 million bolivars under the old system, and many of those bills were rare, forcing customers to pay with a thick bundle of paper. 

Follow Us On Google Newsstand: Click Here