The president of the Un Nuevo Tiempo party (UNT), Manuel Rosales Guerrero affirmed that the economic situation in Venezuela is unmanageable. In relation to the new measure of the Central Bank of Venezuela (BCV) that incorporates three new banknotes to the current but non-existent Monetary Cone.
The founder of the UNETE Party recalled that a dollar in 1998, when Hugo Chávez won the elections, was worth 565 bolivars, and that same dollar was equivalent to 1,635,000 Bs (plus 8 ceros after two ‘reconversions’) at the beginning of 2021.
Likewise, Rosales states that in recent years 8 zeros have been removed from the destroyed bolivar. “So without even considering other factors, that same 1998 dollar is today equivalent to the unpronounceable amount of Bs 163,500,000,000,000. However, outside of the ‘makeup’ (white wash) of the elimination of zeros, none of the reasonable measures that economic science or monetary policy advises have been taken to stop the absurd devastation of the currency.”
In the opinion of the leader from Zulia State, we are faced with the incredible reality that it is impossible for the accounting of any company to work with so many digits. Therefore, he affirms that “the situation is already unmanageable and it is expected that again 6 more zeros will have to be removed from our already almost non-existent currency, with which the same dollar that was equivalent to Bs 565 in 1998, would be worth Bs 16,350. 000,000,000,000,000; that is to say, sixteen trillion fifty thousand billion bolivars of those of 1998 (Latino, not Anglo-Saxon trillions).”
Rosales asserted that without a doubt Venezuela will continue to suffer from the highest hyperinflation on the planet. “According to the IMF, the highest inflation in the world in 2020 was Venezuela with 6,500% and the second highest was suffered by Sudan with 103%, an African country that is mired in war,” he emphasized.
On the other hand, he recalled that everything began in 2004 when Chávez requested a “billion dollars from the reserves” under the pretext of financing the agricultural sector, “and although at the beginning the Board of the BCV refused, in 2005 the National Assembly (Chavista majority) and the Government agreed to change the destination of the oil contribution and create a new program financing mechanism, which led to the modification of the Central Bank Law.”
“In practice they eliminated nothing more and nothing less than the autonomy of the Central Bank of Venezuela, which prohibited the body from being subject to the Executive’s financial guidelines and more specifically prohibited it from financing public spending,” he continued.
The Zulia leader ended by reflecting: “Why was such a prohibition contemplated in the law? Well, we are living the reason dramatically today. When Central Banks issue money without support (we used to call it inorganic) to finance government spending, the inevitable consequence is the loss of value of the currency.” The BCV issues money without any real value because the bolivar does not appear in any international marker and in the country the bills end up in the garbage cans because they serves no purpose.