Venezuelan President Nicolas Maduro announced Friday the cost of the cryptocurrency Petro and the size of the new minimum wage in the country since August 20, when Venezuela will switch to a new, denominated currency - a sovereign bolivar.
According to Maduro, one Petro will cost $60, or 3,6 thousand new bolivars (360 million non-denominated bolivars). At the same time, the "black market" rate on Friday is 5,9 million old bolivars per dollar. Five zeros will be removed from the current bolivar.
The minimum wage will be half Petro, that is, 1,8 thousand bolivars, or 180 million old bolivars. This means a sharp increase by almost 60 times the minimum wage, which now equals to only 3 million bolivars (30 new bolivars).
Also Maduro announced the growth of VAT in the country from 12% to 16%, according to AVN news agency.
"Today, Maduro killed off the new monetary cone. In short time the five zeros they had taken away from the currency will have served for nothing. No Venezuelan deserves to live through this tragedy meanwhile these incapable people continue destroying our homeland!" The opposition leader Henrique Capriles said on Twitter commenting on the financial novelty.
Earlier, Venezuelan President announced two monetary units - Bolivar and Petro to run in the country from August 20. At the same time, old money also remains valid until the moment of their disappearance. The sovereign bolivar will be tied to Petro.
WHY IS IT IMPORTANT?
- Venezuela released petroleum-backed cryptocurrency ‘Petro’ in February, becoming the first country with its own cryptocurrency, which is supported by oil reserves, trying to find a way to escape from economic crisis aggravated by the U.S. sanctions. However, the U.S. President Donald Trump has signed an executive order barring U.S. companies and citizens from trading in Venezuela's cryptocurrency a month after Petro has appeared.
- According to the country’s leader, the switch will stabilize the income and the situation of workers significantly. Now, in his opinion, scammers will not have opportunities for fraud, since prices will be tightly tied to the national currency.