AROUND THE WORLD
VENEZUELA CURRENCY WOES CONTINUE
Venezuelans were instructed on August 5 to slash six zeroes off their inflation ravaged bolivar currency as the purchasing power of the domestic currency continued to drop dramatically.
The battered bolivar was planned to be replaced October 1 with a digital bolivar which is understood to be released in physical form. Sources indicated the new physical currency will consist of a 1-bolivar coin and bank notes with face values of 5, 10, 20, 50, and 100 bolivars.
According to an El Banco Central de Venezuela or Venezuela Central Bank one-line statement, “All monetary amounts expressed in national currency will be divided by one million.”
The move isn’t unanticipated. On August 4 Cesar Aristimuno, director of Aristimuno Herrera and Associates, told the news reporting agency Agence France-Presse, “It was an expected decision. By itself it was necessary ... the billing and accounting processes for companies were already practically impossible.”
Aristimuno said he observed people using a short hand for prices, expressing currency in thousands instead of millions. He added, “We cannot hope for economic miracles from this decision, taking into account that ... it comes without any underlying economic announcements that could reduce inflation or boost GDP [Gross Domestic Product].”
On August 26 the central bank issued Resolution No. 21-08001 dated August 6 “to regulate the aspects related to the new monetary scale.”
According to the bank statement, “Individuals and public and private entities are obliged to perform the corresponding amendments in their computer systems (data, data structures, programs, routines, screens, input and output reports of information, sending and receiving messages, among others) before 1 October 2021, so they have the capacity to process operations that imply reference to the national currency in the new monetary scale.”
In June 2019 the central bank said of its new bank notes they would “complement and optimize” the monetary system, the purpose of the new currency being to make payment systems “more efficient.” Nothing was said about inflation in the bank’s statement.
Inflation rose by about 9,500 percent during 2019, about 3,000 percent in 2020, and additional 265 percent between January and May 2021. Venezuela is currently into its fourth straight year of hyperinflation and its eighth straight year of recession. As of July 1, it took 3.43 million bolivars to equal one U.S. dollar.
The minimum monthly wage was tripled by the government in May, but inflation remains so high many stores have been reported to be listing prices in U.S. dollars.
The all but extinct current coinage meant to be in circulation consists of the nickel-plated steel 50 centimos and the ringed bimetal 1 bolivar. The bank notes now to be withdrawn are issued in denominations of 10,000, 20,000, 50,000, 100,000, 200,000, 500,000, and 1 million bolivars. Venezuelan hero Simon Bolivar’s mausoleum appears appropriately in a vignette on the back of each of these bank notes.
ADDRESSING ILLICIT DIGS AND INSURGENT FUNDING
Do terrorist and insurgent groups fund their activities in part through selling antiquities including coins looted from archaeological dig sites and museums?
This question has
