As previewed yesterday, on Monday Venezuela officially slashed five zeros from prices and its currency as part of what has been dubbed one of the greatest currency devaluations in history which slashed the value of the official bolivar by 95%, an overhaul that President Nicolas Maduro said would tame hyperinflation, and which everyone else called the latest desperate failed socialist policy that will push the chaotic country deeper into crisis and unleash even higher hyperinflation (impossible as that may sound: as a reminder the collapse of Venezuela's currency recently surpassed the Weimar republic). There were no riots - or celebrations - on Monday, however: streets were deserted and shops were closed due to a national holiday that Maduro decreed for the first day of the new pricing plan for the stricken economy, which the International Monetary Fund has estimated will have 1 million percent inflation by year end. The price change comes with a 3,000 percent minimum wage hike, tax increases meant to shore up state coffers and a plan to peg salaries, prices and the country’s exchange rate to the petro, an elusive state-backed cryptocurrency. Venezuela’s main business organization, Fedecamaras, on Monday slammed Maduro’s economic plan as “improvised” and said it will cause confusion and put the country’s economic activity at “severe risk.”

“Pegging the bolivar to the petro to us seems to be a serious mistake,” said Fedecamaras President Carlos Larrazabal at a news conference. The new bolivar, which will be in circulation alongside the old currency during a transitional period, will be pegged to the country's state-backed cryptocurrency, the petro. The bolivar traded on the opaque black market on Monday at around 96 bolivars to the dollar, a rate reflecting the monetary overhaul and which implies a depreciation in real terms of nearly 30 percent since last week. While the US has denied the accusations, it has described the former bus driver and union leader as a dictator and levied several rounds of financial sanctions against his government and top officials.
The Venezuelan bolívar fuerte is replaced with the "Sovereign Bolivar" in an attempt to curb inflation. Venezuela announces that the new currency will be linked to the petro, a form of cryptocurrency operated by the country.