Venezuela introduced a new currency on Aug. 20 as a hopeful solution to the country’s rapidly devaluing currency and skyrocketing inflation rates, but after just a few weeks, Venezuela is already seeing 100 percent inflation.
The Venezuelan government issued the new currency, called the “sovereign” bolivar, to replace the “strong” bolivar, NPR reported on the day of the rollout.
The new bolivar is worth about 100,000 of the old bolivars, and is pegged to the government’s cryptocurrency, the petro.
The Bloomberg Cafe Con Leche Index revealed Thursday that the price of a cup of coffee has risen to 50 bolivars.
For comparison, 50 of the new bolivars is 5 million of the old ones, after President Nicolas Maduro removed five zeros on July 25 in an effort to stabilize the economy and simplify transactions.
The annual inflation rate is now hitting over 100,000 percent.
Venezuela is currently suffering through a five-year crisis that is leaving it with a collapsed economy, hyperinflation and a complete breakdown of public goods and services, including deteriorating roads, food shortages, disturbing water cleanliness, failed electricity, high crime and a lack of adequate medicine for the sick. (RELATED: Inflation In Venezuela On Track To Reach 1 Million Percent In 2018)
The conditions in Venezuela are causing mass migration flows out of the country, which could lead to an intensified spillover in neighboring countries. Some women have felt forced into prostitution because of the crisis in an effort to survive and provide for their families.
Venezuela’s minimum wage was recently equivalent to about $1 a month, validating these women’s desperation.
Maduro went to China on Wednesday to boost relations with the country and seek help in stabilizing the government, ABS-CBN News reported.
Venezuela gave China another stake in their oil industry and signed deals in several of their energy industries, but Beijing made no mention of new funds for the failing country.
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