In an effort to address soaring inflation rates, the Venezuelan government announced last week that it will begin issuing currency in higher denomination units on December 15.
The new measure comes after the bolivar’s steepest decline yet last month, falling 67% between the end of October and November. One U.S. dollar is now roughly equivalent to 4,587 bolivars, according to Dolar Today, a finance company that tracks the black market value of Venezuelan currency based on exchanges in Colombia.
The government will begin issuing notes in 500, 1,000, 2,000, 5,000, 10,000 and 20,000 bolivars, a drastic uptick from the previous highest available currency note of 100 bolivars.
The rapid inflation rates over the past several years have “forced Venezuelans to ditch wallets in favor of bags of cash for everyday transactions,” as Bloomberg reports. “Some shopkeepers have started to weigh wads of notes instead of counting them to save time.”
The new denominations will hopefully help the Venezuelan economy find some stability and sanity in the new year, especially as cash has become increasingly difficult to access from ATM machines, and the nation’s credit card system has been subject to recent glitches and malfunctions.
The International Monetary Fund estimates that Venezuela has experienced a 476% inflation rate over the 2016 calendar year, a nearly unfathomable amount compared to other countries. In the U.S., for example, the cost of living has risen just 29% over the past 12 years, while household incomes have grown 26% in the same time.
The currency changes may be only one of several economic measures on the docket for President Nicolas Maduro’s administration, though details of additional plans remain vague.
“There’s an action being planned that is going to have a very important impact,” said foreign trade and investment minister Jesus Faria. “In the middle of this turbulence, there have to be continuous revisions, and that’s what we’re adopting, adjusting to the new challenges and conditions.”
In some ways, the government’s mere acknowledgement of the situation is a welcome change of pace. Despite offers of foreign aid from the U.S., where 95.4% of Americans make contributions to charitable giving, the Maduro government has repeatedly refused offers of food staple and medical supplies from any outside sources and repeatedly blamed economic woes on “mafia” groups from Colombia planning an “economic coup” against the socialist government.
Yet in more good news for Venezuela’s future, the Organization of the Petroleum Exporting Countries (OPEC) has finally ceded to demands from Maduro and other oil-producing regions to cut production levels for the first time since 2008. Those changes could allow Venezuela to generate an additional $8 billion to $9 billion in oil revenue next year, according to Faria, and in turn make imported goods more widely available and accessible.
At the same time, Maduro still claims that the rates of inflation and economic hardships throughout the country have been greatly exaggerated by the media.
“In this country, no one can set prices based on DolarToday,” he said in a recent address. “I’m not going to permit it. Looking for resources, you don’t know all that we’re doing. In December, I’m going to take a trip, up to two trips, to finalize the resources the country needs for 2017 and 2018.”