The authorities of the hyperinflationary Venezuela announced an increase in 60 times the level of the minimum wage, which will soon be tied to the “oil-backed” national cryptocurrency El Petro. This is reported by the local agency AVN.
Along with raising social standards, the authorities will also conduct a denomination of the bolivar, in the course of which five zeros will be removed from the denomination.The new national currency will be tied to El Petro and will be called the “sovereign bolivar”.
“I decided to introduce a new minimum wage, tied to El Petro. Therefore, I fixed the minimum wage for all at the level of 1,800 sovereign bolivars or 0.5 Petro, ” said President Nicolas Maduro.
He also announced an increase in VAT from 12% to 16%.
Note that in June, the minimum wage in Venezuela was set at 3 million bolivars. For comparison, the US dollar on the black market currently stands at about 6 million bolivars.
According to the financial control committee of the National Assembly, in July, inflation in Venezuela at an annual rate of almost 83,000%. According to the International Monetary Fund, the inflation rate in this country can reach 1 000 000% by the end of the year. However, official data on the growth of prices in the country have not been published for several years.
It is also worth noting that against the backdrop of monetary reform in Venezuela there is a sharp increase in demand for bitcoin, for which the p2p-platform LocalBitcoins is actively used.
Recall, the launch of denomination processes, changes in the system of salaries and prices, as well as the binding of a new Venezuelan bolivar to El Petro are scheduled for August 20.
According to Maduro, this set of measures will overcome the economic crisis and hyperinflation, “significantly improve the situation of workers” and lay the foundation for the country’s social-economic prosperity.