| This article is terrible. > Devalue Venezuela’s currency, the bolivar, by a whopping 95%. The new currency will be renamed the "sovereign bolivar." > Instead of an exchange rate of 250,000 bolivars per US dollar, it will increase to around 6 million. This is not a devaluation by 95%. The math doesn't add up. > The petro is valued by the Venezuelan government at around $60, or 3,600 sovereign bolivars. So 60 sovereign bolivars are one USD? Previously it said 6 million sovereign bolivars are one USD. > To make things more complicated, the new sovereign dollar will also be re-denominated, which will remove about five zeros from its unit measurement. Oh, okay. I assume they mean sovereign bolivar, not dollar (did nobody proofread this?). That makes the above point make more sense. > At the same time, President Maduro also announced a huge 3,000% increase to the minimum wage. > So in the new re-denominated currency, a person on the minimum wage will receive around 1,800 sovereign bolivars a month, instead of 1.8 million. Is that 3000% increase in bolivars? In real terms? And again, I can't see the math adding up, even taking the supposed 95% devaluation. And I haven't gone into any of the cryptocurrency stuff... There's probably a lot of stupidity going on in this new Venezuelan policy, but that article makes a total mess of it on top of it. It's context-free reporting, by somebody who doesn't seem to care to understand what they're reporting, and the numbers just don't fit together. The best I can make of it is: 1. The Venezuelan government still refuses to let the Bolivar float freely, which means that black market currency exchanges will continue to operate. 2. The Venezuelan government is changing the official exchange rate of Bolivar to USD. 3. The Venezuelan government is replacing the bolivar by the sovereign bolivar, where 1 sovereign bolivar = 100,000 bolivar. 4. They're increasing the minimum wage by an effective factor 100 in domestic currency. (The value of the minimum wage internationally will change by a different amount -- and not 3000% -- because of point 2, but any numbers you're getting out of the article are likely moot anyway because of black market exchanges.) 5. They're introducing some weird cryptocurrency gimmick that isn't explained properly. Edit: And here's a Reuters article with different numbers for the minimum wage (stating a 3 mio baseline as opposed to 1.8 mio.): https://www.reuters.com/article/us-venezuela-economy/venezue... |