LONDON (Bloomberg) - Venezuela will remove six zeros from the bolivar in another attempt to save a currency that has been wracked by years of hyperinflation.
The central bank said it plans to print new bills that will go into circulation Oct. 1, while encouraging Venezuelans to use a digital version of the currency to simplify daily transactions. The currency will be branded the “Bolivar Digital,” the bank said in a statement posted on Twitter.
President Nicolas Maduro’s government has vowed to protect the use of the bolivar even as it has allowed widespread adoption of the U.S. dollar, a move intended to quell hyperinflation that has been in place since at least 2017 and ease shortages in stores. Bloomberg’s Cafe con Leche index, a measure of inflation, has registered a 2,575% rise over the past year. Although the dollar is preferred by most in the country, bolivars are needed for everyday transactions, like bus fares and to pay at gas stations that receive government subsidies.
The government has made similar adjustments to the bolivar before, having cut eight zeros since 2008, not including Thursday’s decision. Still, inflation and depreciation have eroded its purchasing power, forcing individuals and businesses to engage in complex operations to carry out simple transactions, as accounting and payment systems collapse from the overflow of digits.