Venezuela: Businesses close as new currency launched August 21 /update 4

Event

Thousands of businesses were closed in Venezuela on Tuesday, August 21, a day after the redenomination of the country's currency took effect, with "sovereign bolívars" being introduced to gradually replace bolívars currently in circulation. Public transportation services were also suspended in Caracas on Tuesday amid a one-day national strike called to denounce the poor state of the national economy, as well as widespread low wages and poor living conditions. A heightened security presence was reported across Venezuela in anticipation of the introduction of the new currency. Additional store closures and public transportation disruptions are possible in the coming days.

Context

The redenomination took effect on August 20, removing five zeros from every denomination of the country's currency. The Venezuelan government has also announced measures to raise the minimum wage by 34 times current levels by September 1, raise the value-added tax, and cut fuel subsidies.

The redenomination was originally scheduled for June 4 but was postponed for two months by President Maduro on May 29. Venezuela currently has the highest inflation rate in the world, projected by the IMF to reach 1,000,000 percent in 2018. The Venezuelan economy has been in a recession since 2014 and is expected to shrink 18 percent in 2018 amid the bolívar's hyperinflation.

Advice

Individuals in Venezuela are advised to keep abreast of the situation. In general, persons in Venezuela are advised to strictly avoid all protests and political events due to the high likelihood of violence and to remain up to date on current sociopolitical developments.