(CNN) – Venezuela is introducing a new currency with six zeros to facilitate transactions, according to the country’s central bank.
One million bolivars will now be 1 “digital bolivar”, which is equivalent to 20 pennies per dollar. Bolivar is one of the most devalued coins in the world.
The “Sovereign Bolivar” was introduced in a similar move in 2018, effectively lowering five zeros from the previous currency to combat the long-term inflation woes affecting the Caribbean nation affected by the crisis.
Venezuela’s Vice President Telsi Rodriguez explained on Monday that the new currency name “Digital Bolivar” refers to the incentive for electronic transactions as another tactic to combat inflation.
This is the third time in 15 years that Venezuela has introduced a new currency, with a total of 14 zeros “cut” since 2008.
Three Venezuelan valuable financial analysts have told CNN that a new currency is enough to solve Venezuela’s economic crisis since 2014.
Although Venezuela is experiencing the highest inflation in the world between 2018 and 2020, the International Monetary Fund estimates that the current inflation rate is on track to reach 5,500% annually.
More than three-quarters of the population live in poverty, according to an independent survey of living conditions released Wednesday by Andres Bello Catholic University in Caracas.
CNN’s Stefano Posephon in Bogota and Karim El Damanhori in Atlanta
