Venezuela's New 100,000-Bolivar Money Bill Is Worth Less Than US$2.5
Venezuela has a new 100,000 bolivar note, but it's not worth a lot right now despite the five zeroes in it. The new denomination that Venezuelan President Nicolas Maduro revealed on Wednesday, Nov. 1, is worth less than US$2.50 when exchanged in underground markets.
President Maduro, in a nationally televised broadcast, unveiled the new gold-colored bill last week. He also announced a 30 percent hike in the minimum wage in the same public address, according to the Associated Press via ABC News.
It looks to be a temporary measure that will eventually lead to the government's plan to eventually abandon paper money after the 2016 economic collapse triggered a severe shortage of paper currency.
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"The use of the physical currency is being replaced," Maduro said.
The socialist government headed by Maduro introduced a 20,000 bolivar denomination earlier this year, and it is now devalued at around 50 U.S. cents. The new 100,000 bill, the largest ever minted in the history of the country, is worth roughly US$2.42 when exchanged for U.S. dollars in the black market, according to Bloomberg.
The new denomination, which was circulated as early as Thursday, Nov. 2, will also ease the daily transactions for Venezuelans who have to carry whole bags of cash just to be able to afford basic necessities. It's also aimed to bring some stability to the country's rocky money supply, a state that President Maduro blames Colombia for.
"We have been updating the monetary cone while facing this attack on the currency," Maduro said, referring to the black market trading of the bolivar to Colombia that contributed to the currency's inflation.
Currently, one U.S. dollar is worth 41,290 Venezuelan bolivars on the black market. The communist government's official exchange rate values the currency at 3,345 bolivars to the dollar.
Maduro also approved a measure that will release a one-time 500,000 bolivar infusion to four million households in the country as his "special Christmas bonus."
