In the city of Elorsa in the west of Venezuela began to produce an alternative currency. Because of the rampant inflation in shops and on the hands of residents, there is almost no basic money – bolivars, so the local mayor’s office issued its own banknotes.
In early March, Venezuela collided with a powerful depreciating money: up to 6000% annual inflation and 80% monthly. Local authorities announced an increase in the minimum wage by 58%, but this is still very small – $ 12 at the official rate. Prices in stores, pensions and savings are considered at the rate of the black market, where the minimum wage is $ 2.
Ante la crisis del efectivo, empiezan a circular monedas locales. Acá está el Elorza, emitido en la ciudad de Elorza, estado Apure. La hiperinflación y la falta de efectivo están haciendo que surjan mini bancos centrales. pic.twitter.com/ESACRO9bDf
— Jose Guerra (@JoseAGuerra) March 16, 2018
In the alternative currency, José Andrés Elorza, the local hero of the war, after whom the city is named, is portrayed. “People do not have bolivars to buy, so we created another currency, and have already sold 2 billion bolivars,” the mayor of Elorsa said. According to the rate of the black market of Venezuela, 2 billion bolivars – it’s less than 9 thousand dollars.
Ante la crisis del efectivo, empiezan a circular monedas locales. Acá está el Elorza, emitido en la ciudad de Elorza, estado Apure. La hiperinflación y la falta de efectivo están haciendo que surjan mini bancos centrales.
In Venezuela, a limit has been set: a person can spend no more than 10 thousand bolivars per day. This amount is equivalent to 5 US cents. Elrosa’s authorities exchange Bolivars for an alternative currency with a commission of 8%: you need to make a bank transfer to the account of the administration. If residents do not spend something, they can reimburse extra notes at the same rate.
The commune of the region of Catia in the capital of Caracas also came up with its own currency in order to arrange transfers among local residents and payment of communal services. At the chosen rate, one panal costs about 5 thousand bolivars. Among other measures to save from devaluing money: in February 2018, authorities launched the state-owned crypto currency “Petro”, which costs $ 60 or one barrel of Venezuelan oil.
Venezuela for the fourth year in a row becomes the leader of anti-rating Bloomberg among the failed economies of the world. Since 2014, the country’s economy has only deteriorated because of the fall in oil prices, but the authorities instead of drastic measures allowed banks to print additional bills. In 2016, the inflation rate reached 720% because of what stores began to weigh bills, and not take them individually.