Venezuelan ISO change October 1

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Venezuela’s Battered Bolivar Gets Makeover With Six Fewer Zeroes

 

Alex Vasquez and Nicolle Yapur

Fri, October 1, 2021, 9:40 PM·

 

 

Venezuela’s Battered Bolivar Gets Makeover With Six Fewer Zeroes

(Bloomberg) -- Venezuela is launching a new version of the bolivar in the latest attempt to salvage a currency so beaten down by years of hyperinflation that residents have adopted the U.S. dollar.

The so-called digital bolivar, which is being introduced Friday, effectively removes six zeroes from the “sovereign bolivar,” which started circulating just three years ago.

 

New banknotes and coins will be put into use. Bank accounts will be adjusted to reflect the redenomination. And debit and credit card purchases will become easier: there were so many digits involved in some transactions that merchants were forced to split the transaction into multiple card swipes.

It’s another maneuver aimed at propping-up the national currency, even though President Nicolas Maduro’s government is permitting the use of the U.S. dollar as a way to cope with runaway inflation and shortages. The government has implemented two other currency changes since 2008, dropping eight zeroes. Hyperinflation, among the highest in the world, has slowed to 2,146% per year from more than 300,000% in 2019, according to Bloomberg’s Cafe Con Leche index.

Under Friday’s change, the largest former banknote, for 1 million bolivars -- worth about $0.23 --will be replaced by a 1-bolivar coin. One dollar will fetch around 4.2 bolivars instead of 4.2 million bolivars at the official exchange rate.

“This is useless. Prices will continue to rise and, in a few months, the new bills will be useless,” said Leida Leon, a 37-year-old cleaning worker at a Caracas school.

On Thursday, demand for dollars rose as people feared a prolonged suspension of banking services as the redenomination is rolled out, said Luis Arturo Barcenas, senior economist at Caracas-based financial analysis firm Ecoanalitica.

The central bank said Friday it would intervene on the FX market, selling $50 million through the banks’ exchange mechanisms, according to a notice sent to financial institutions. The amount, larger than normal interventions, comes after a spike in the parallel exchange rate over the past two days.

Two-thirds of retail transactions involve the U.S. dollar, according to Ecoanalitica. Yet, many Venezuelans need bolivars for everyday transactions, like bus fares and to buy gas subsidized by the government. While the government is attempting to boost the use of digital payments, many regions are beset by regular electrical blackouts that affect communications.

Venezuelans have faced disastrous government policies and pressure from U.S. sanctions that have put the country on the brink of its eighth-straight year of economic contraction. More than 5 million people have fled the country, once one of Latin America’s wealthiest.

An estimated 76.6% of Venezuelans are living in extreme poverty, up from 67.7% last year, according to a university survey on living conditions known as Encovi.

 

link  :  https://finance.yahoo.com/news/venezuela-battered-bolivar-gets-makeover-083000478.html?fr=sycsrp_catchall

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Venezuela Economic Outlook

By Arca Análisis Económico

Here is our monthly summary of recent economic developments in Venezuela:

 

The last four-month period of the year started with Venezuela's third monetary reconversion over the previous 13 years. The prices of products and services in commercial establishments had to be published as of Sept. 1, 2021, in their current form and the new monetary scale. Six zeros will be eliminated from the current currency. This measure will be enforced one month before the Central Bank of Venezuela (BCV) announces the new monetary reconversion. With this financial institution requirement, there will be three values to consider when paying for products and services: 1) the bolívar soberano, 2) the digital bolívar, and 3) the U.S. dollar. For transactions with the new coinage system, the BCV explained that the new monetary unit is obtained by dividing the sum by 1 million, equal to the elimination of six zeros. The new monetary scale consists of bills of 5, 10, 20, 50 and 100 bolívares soberanos and a 1 bolívar soberano coin. These currencies will circulate for an indefinite period, along with the current coinage system, to facilitate the population's adaptation and to be able to make accurate payments. Despite attaching "digital" to the bolívar soberanos, the BCV's official announcement only clarifies the intention of increasing retail payments made through digital mechanisms, considering the high costs involved in the logistics of constantly issuing bills and coins for circulation in an inflationary environment. The reasons are obvious: hyperinflation has been systematically wiping out circulating coins and bills, and their replacement is costly. The ratio of cash to monetary liquidity today is barely 2.15 percent. One of the main consequences of this cash shortage dynamic caused by high inflation has led the country's banks to close branches and reduce the number of ATMs. As a result, citizens have to wait in long lines or make longer trips every day to find bolívares soberanos. Claudio Rivas, the secretary general of the Federation of Bank and Related Workers (Fetrabanca), said that in December 2019, Fetrabanca registered 7,512 ATMs in the country. However, a year later, there were 5,762, representing a 23 percent drop. This figure has decreased due to high inflation, de facto dollarization and the maintenance of these ATMs, which need foreign currency to be changed or importation of the parts required to adapt or perform maintenance to these machines. Rivas assured banks that they have the resources to repair ATMs. "You gain nothing with having the ATMs in good condition if you don't provide the tools, such as cash, to fill it with," he said. For this reason, he indicated that the ATMs had lost their functionality, given the lack of bolívares soberanos. According to data published by the Superintendency of Banking Sector Institutions (SUDEBAN), in March 2014, there were 9,542 ATMs in the country. However, in the last report published in March 2021, SUDEBAN reported the existence of only 2,275. Due to this exact situation and the COVID-19 pandemic, banks have also been forced to close branches. For example, the secretary general of Fetrabanca pointed out that in 2019 there were more than 7,400 bank branches, but now there are 3,700 left; a 50 percent decrease

In this regard, it is believed that the logical consequence of the bolívar soberano cash dynamic will gradually diminish in the short and medium term. There are few bastions left for the use of bolívares soberanos in cash as a retail payment. The most significant goods and services for which bills and coins were used were petrol and public transport. The former has been significantly dollarized after incorporating petrol pumps at international prices; those that maintain subsidized prices can only be paid for through sales outlets. Public transport is still primarily cash-based, but there are clear intentions to migrate to digital payments. It is important to note that although it seems that Venezuela is heading toward a cashless economy with this new reconversion, this is not entirely true. Cash is still used for most everyday payments, but cash payments are in U.S. dollars. According to a report on dollarization presented by Asdrúbal Oliveros, director of the Caracas-based consulting firm Ecoanalítica, 51.4 percent of transactions were made with foreign currency in cash, a lower figure than the 80 percent obtained in a previous study. A significant part of payments is still carried out with U.S. dollars. However, dollars are losing ground to digital dollar payments through Zelle, PayPal and even cryptocurrency payments. The total elimination of cash payments in bolívars is not a realistic goal, but Venezuela is heading in that direction despite all potential setbacks. For instance, a field study conducted by Ecoanalítica (in 10 cities and 291 establishments) in November 2020 indicates that 33 percent of Venezuela's total transactions are still made in bolívares soberanos. Reducing the small percentage of remaining bolívar soberano payments in cash will depend on how fast and effective the mechanism is devised to facilitate payments for purchasing or providing services, such as gasoline and passenger transport. To expect digitalization, it will require relying on stable information and communication technology services. Therefore, the deployment of telecommunications infrastructure, the penetration of such infrastructure throughout the national territory and the investment in new generation networks will be needed for the potential development and implementation of the digital economy in Venezuela.

 

link  :  venezuelaeconomicoutlooken.pdf

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Venezuela dismisses the six zeros of the sovereign bolivar
Drafting by Newsroom September 30, 2021 in the US
(September 30, 2021. El Venezolano) .-

On August 5, the Madurista regime announced a new monetary reconversion amid the inflation that is impacting the country. As of this October 1, a six-piece monetary cone called “Bolívar Digital” will begin to circulate, in which six zeros of the sovereign Bolívar will be suppressed.

Freddy Ñáñez, Minister of Communication and Information of the madurismo, explained that the measure consists in that all monetary amounts "will be divided by 1,000,000." According to the change, it seeks to "facilitate" the use of the Bolivar, taking it to "a simpler monetary scale to carry out transactions, computer systems and accounting records."

This is the third reconversion in Venezuela in the last 13 years, in which 14 zeros have been eliminated from the national currency.

Monetary cone
As of Friday, October 1, a monetary cone with five new bills of 5, 10, 20, 50 and 100 bolívars and a 1 bolívar coin will come into effect.

On the other hand, the banknotes of Bs. 10 thousand, Bs. 20 thousand, Bs. 50 thousand, Bs. 200 thousand, Bs. 500 thousand and Bs. 1 million, which are currently in circulation, will coexist with the pieces of the new monetary expression, "until the Central Bank of Venezuela has it."

"Round off" figures
During the currency transition period, the BCV reported that when making sales or purchases, the product price figure must be divided by one million. If the result of the new figure includes a fraction of three or more decimal places, it must be “rounded”.

That is, if the third decimal is greater than or equal to five, the second decimal must be increased by one unit, but if the third decimal is less than five, the figure (amount) will keep the first two decimal places.

Banking goes into hiatus
Financial institutions will work to adapt their platforms and show the new amounts expressed in digital bolivars, as reported by Delcy Rodríguez.

 

link  :  https://elvenezolanonews.com/2021/09/30/venezuela-despide-los-seis-ceros-del-bolivar-soberano/

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Venezuela dismisses six zeros from the Sovereign Bolívar
September 30 2021, 6:24 am
Posted in: Featured, Economy

A person holds several banknotes, on July 28, 2021, in Caracas (Venezuela)

 

On August 5, the Nicolás Maduro regime announced a new monetary reconversion amid the rampant inflation that impacts the country. As of this October 1, a six-piece monetary cone called “Bolívar Digital” will begin to circulate, in which six zeros of the sovereign Bolívar will be suppressed.
Freddy Ñáñez, Minister of Communication and Information, explained that the measure consists in that all monetary amounts "will be divided by 1,000,000." According to the Government, the change seeks to "facilitate" the use of the Bolivar, bringing it to "a simpler monetary scale to carry out transactions, computer systems and accounting records."
This is the third reconversion in Venezuela in the last 13 years, in which 14 zeros have been eliminated from the national currency.

Monetary cone
As of Friday, October 1, a monetary cone with five new bills of 5, 10, 20, 50 and 100 bolívars and a 1 bolívar coin will come into effect.
On the other hand, the banknotes of Bs. 10 thousand, Bs. 20 thousand, Bs. 50 thousand, Bs. 200 thousand, Bs. 500 thousand and Bs. 1 million, which are currently in circulation, will coexist with the pieces of the new monetary expression, "until the Central Bank of Venezuela has it."

 

"Round off" figures
During the currency transition period, the BCV reported that when making sales or purchases, the product price figure must be divided by one million. If the result of the new figure includes a fraction of three or more decimal places, it must be “rounded”.

That is, if the third decimal is greater than or equal to five, the second decimal must be increased by one unit, but if the third decimal is less than five, the figure (amount) will keep the first two decimal places.

Banking goes into hiatus
Financial institutions will work to adapt their platforms and show the new amounts expressed in digital bolivars, as reported by Vice President Delcy Rodríguez.

Telecommunications
For their part, the telecommunications companies will adapt their payment, consultation and recharge platforms. Movistar recommended its customers to recharge before 09-29-2021, while Digitel issued a statement stating that as of 09-30-2021 at 4:00 P.M. Some services and channels of attention and self-management could be affected.

Movilnet also communicated that due to the launch of the new monetary expression, its electronic top-up systems and electronic wallets would work until Wednesday, September 29.

"Economic failure"
Venezuelan opponents considered that the new monetary expression is a sign of the "failure" of the Executive's economic policy.

“Our currency is worth less and less. The crisis is deepening and Venezuelans are poorer ”were the words of two-time presidential candidate Henrique Capriles.

“The dictatorship announces a new monetary reconversion. There are already 14 zeros that have been erased from the currency in 13 years, an unequivocal symptom of the failure of an economic policy, ”wrote Julio Borges through Twitter.

Nervous shopping in Lara
In a tour carried out by LA PRENSA DE LARA, it was evidenced that the Larenses were making “nervous purchases” of food and other essential products. They also sought to invest sovereign bolivars in cash dollars, considering that the national currency will continue to lose value compared to the US currency despite starting to be called “digital bolivar”.

 

link  :  https://www.lapatilla.com/2021/09/30/venezuela-despide-seis-ceros-del-bolivar-soberano/

 

 

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Venezuela | The bolivar loses six zeros in a new currency reconversion Access to the comments
By Carmen Menéndez • last update: 09/30/2021 - 23:45

 

There is a place in the world where children play in the street with legal tender bills as if they were trading cards. That place is Venezuela, where bolivars have become dead paper due to the highest hyperinflation in the world. To give you an idea, this Thursday, September 30, a day before the currency conversion, it took almost four million two hundred thousand bolivars to obtain a single dollar.

The sovereign bolivar gives way to the digital bolivar, with six zeros less
In search of a solution, the Venezuelan Government cuts to the bone. This Friday, the sovereign bolivar will give way, after amputation of six zeros, to the digital bolivar, which despite its name is not a cryptocurrency. That means that for every million sovereign bolivars, one digital bolivar will be obtained. This monetary reconversion is the third that Venezuelans have experienced so far this century.

Among the population, who have seen their purchasing power melt like ice in the sun, there is a feeling that this reconversion, apart from ending the dizziness of endless zeros, is not going to bring any improvement to an economy, almost totally dollarized.

Dollarized economy, while the Colombian peso circulates near the border
In shop windows and shops, the dollar reigns. About 70% of transactions in Venezuela are already carried out in greenbacks. And when it is not, other alternatives are sought.

In Puerto Concha, a fishing village in the state of Zulia, bordering Colombia, the bolivar is already part of history. Instead, Colombian pesos are used.
"At least it is more stable," says a trader in reference to the Colombian pesos.

"The bolivar does not give us. It is easier with the peso than with the bolivar," adds a woman.

Venezuelans juggle living in an economy that has been in recession for eight years and hyperinflation for four. Given the collapse of the national currency, which has lost more than 72% of its value so far this year alone, citizens are looking for a bit of economic certainty, whether it comes from the dollar or the Colombian peso.

 

link  :  https://es.euronews.com/2021/09/30/venezuela-el-bolivar-pierde-seis-ceros-en-una-nueva-reconversion-monetaria

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COUNTRY DOLLARIZATION
Venezuela announces a new conversion that will eliminate 6 zeros from the sovereign bolivar
Due to the depreciation of the sovereign bolívar, the banknotes have practically disappeared, since the one with the largest denomination, the one million bolívares, was worth about 25 cents on the dollar
08/05/2021 - 16:31 Updated: 08/05/2021 - 22:06

Four one million bolivar bills, the equivalent of one dollar.

 

The Venezuelan Government has announced this Friday a new monetary reconversion, the third in this century, which will come into force on October 1 and that will eliminate six zeros from the current sovereign bolivar to illuminate the digital bolivar. In 2007, Venezuela underwent a first reconversion process by eliminating three zeros from the currency that became the bolivar fuerte. Due to the depreciation of the current sovereign bolivar, the banknotes had practically disappeared, since the one with the largest denomination, the one million bolivars, was worth about 25 cents on the dollar. "As of October 1, 2021, the digital bolivar will come into effect, by applying a monetary scale that removes six zeros to the national currency. That is, all monetary amounts and everything expressed in national currency will be divided by one million (1,000 .000) ", reads a statement from the Central Bank of Venezuela (BCV) released by the Minister of Communication, Freddy Ñáñez. In 2018, there was another process that ended with the birth of the current sovereign bolivar, which removed another eight zeros from the currency. The statement adds that "this change in the monetary scale" is based "on the deepening and development of the digital economy" in Venezuela and considers it "a necessary historical milestone at a time when the country begins the path of economic recovery." .
Despite this, it will have a one bolivar coin and bills of 5, 10, 20, 50 and 100 bolivars, all of them with the face of the liberator that was rebuilt in 2012 on the obverse and an allusion to the battle of Carabobo, key in independence, on the reverse. "The introduction of the digital bolivar does not affect the value of the currency, that is, the bolivar will not be worth more or less, only that to facilitate its use a simpler monetary scale is being carried out," adds the information. For this reason, he emphasizes that the BCV "will continue to attend to the issuance of the bolivar in its physical expression." "The physical bolivar and the digital bolivar will coexist in a process aimed at rescuing their strength and their benchmark as an expression of our economy," the information added.
Dollarization of Venezuela
Due to the depreciation of the current sovereign bolivar, Venezuela is experiencing a transactional dollarization process, so the US currency is the majority when making cash payments. If you wanted to pay in bolivars, most payments were made by card or with automatic transfers through a platform called Mobile Payment.
However, one of the biggest problems that this type of payment presents is due to poor internet service in the country, which, on many occasions, makes it impossible to pay through these platforms and even the use of dataphones. The BCV added that "the reference exchange rate will continue to be the one determined by the Venezuelan exchange market system." Finally, he explained that the modernization of payment systems "aims at expanding the use of the digital bolivar immediately, facilitating that transfers between clients of different banks are received in a few seconds with the highest international quality standards." "The Government, together with the BCV, will continue to protect and guarantee monetary sovereignty in order to promote the recovery of our economy and make the independence of our country impregnable against local and foreign factors that attack Venezuela."

 

link  :  https://www.elconfidencial.com/mundo/2021-08-05/venezuela-anuncia-una-nueva-reconversion-que-eliminara-6-ceros-al-bolivar-soberano_3218964/

[rvmydinar]

11 hours ago, Artitech said:

To bad I didn’t buy some Venezuelan dollars! I would be rich now!!! I was dumb enough to buy dinar 12 years ago!!! Well, I’m not going to cry over spilled milk! Maybe we will see, the so called RV next year!! Then we can have wheel chair races, at our big party in Vegas instead of dancing the night away!!! JMHO 🤠

Delete 6 zeros was only applied to venezuela citizens in country of venezuela, therefore, venezuela citizens will exchange 1 million old bolivar for 1 new lower bolivar denoms. What about bolivar holders out of venezuela? Let's say if bolivar holders out of venezuela had 1 million old bolivar, then Can bolivar holders out of venezuela exchange 1 million old bolivar for US dollars  after deleting 6 zeros ( 1 million old bolivar x 0.25 usd/ one new bolivar=250,000 USD )?

[Half Crazy Runner]

I read that due to hyper inflation, Venezuela has removed a total of 14 zeros off their currency since 2008. 

[blueskyline]

"The physical bolivar and the digital bolivar will coexist in a process aimed at rescuing their strength and their benchmark as an expression of our economy," the information added."....I find this statement interesting .