VENEZUELA TO REVALUE CURRENCY Pubblico Deposited
The E-Sylum: Volume 10, Number 17, April 29, 2007, Article 25
VENEZUELA TO REVALUE CURRENCY
One currency-related topic we've neglected to cover is the upcoming
currency revaluation in Venezuela, which will bring about the adoption
of a new currency name and banknote issue. Arthur Shippee forwarded
a New York Times article which unfortunately isn't available on the
firm's web site anymore for free. Another article we found is an
opinion piece criticizing the government for addressing only the
current issues and not the underlying economy."After so much insistence on a supposed monetary reform, the government
suddenly decided to adopt only a reconversion. In this case, it will
divide all prices and salaries by 1,000 starting Oct."And starting Jan. 1, 2008, it will issue a new currency called the
Bolivar Fuerte (Bs. F). But of measures needed to lower inflation
and protect the value of this new currency, nothing is said."Since 2001 the Hugo Chávez government had been insisting on the need
for a monetary reform, which is much more complex, of greater range
and more useful than any rudimentary currency reconversion."To the contrary, a reconversion simply means modifying the monetary
denomination."That is, dividing the current value of all bills and coins, as well
as prices and wages, by 1,000. In other words, three zeros will be
eliminated from all the bills and coins in circulation, to be substituted
by others with three fewer zeros. This, moreover, will include, according
to BCV President Gastón Parra Luzardo, designs alluding to nationality,
Venezuelan ethnic origins and its women.""The reconversion will come into force Oct. 1, when all prices and
wages must be simultaneously expressed in Bs. and in Bs. F, but it
will not be until Jan. 1, 2008 when new bills will circulate in
denominations of Bs.F 100, 50, 20, 10, 5 and 2; and coins of Bs.
1,00, 0.50, 0.25, 0.125, 0.10, 0.05 and 0.01. Current bills in bolivars
will continue to be used during a transition period whose duration has
yet to be stipulated, when both currencies may be used. After this
transition period, only the Bolivar Fuerte (Bs.F.) will be valid."To read the complete article, see: Full Story
- 2007-04-29
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