Venezuela’s New Currency Could Lead The Country Into A Deeper Depression

Venezuela’s ongoing economic crisis has only gotten worst. In fact, reports claim that thousands of Venezuelans have desperately crossed the country’s borders, migrating to places like Brazil, Colombia, Ecuador, and Peru in hopes for a better life. The hyperinflation has lead to a severe lack in resources from food and basic medical supplies to frequent water shortages and power outages. It has gotten so bad that president Nicolas Maduro, even tried to issue a new currency. And to top things off, a magnitude 7.3 earthquake struck on Tuesday.

Fortunately, no one was killed or severely injured—thank god. But reports claim that there several building that were shaken and damaged. A more impactful earthquake is the last thing Venezuela needs. Maduro’s measures to improve the country’s economy has only lead them into a deeper economic crisis.

The new economic plan was released on Monday. Not only were taxes increased, the price of gas raised, but Maduro also slashed five zeros out of the devalued currency, the bolívar. It is now referred to as sovereign bolívar. It has left the people of Venezuela completely confused—both vendors and consumers. A lot of people don’t even understand how exactly to calculate the new currency.

“I can’t even understand these numbers,” a woman named Rosa Peña who was trying to shop in a small shoe store in Petare, in Caracas told the New York Times. “My daughter gave me this, and she showed me how to use it, but we can’t understand when we convert big amounts.”

Maduro’s new plan also included an increase in the minimum wage and while that would be a good thing under normal circumstances, most business owners in Venezuela can’t actually afford that, which is resulting in employees fearing they’ll get fired.

Many believe that Maduro’s plan will only sink the country into a deeper depression. The New York Times reports that this is the worst economic crisis the country faces since 1999, when Hugo Chávez first came into power. Mismanagement of Venezuela’s oil reserves—some of the largest in the world— has lead Pdvsa, the state oil company into bankruptcy and with inflation topping 32,000 percent just last week.

It’s going to take some drastic changes in the country’s government and how they manage their oil reserves to solve Venezuela’s severe economic crisis.