Why is the new bolivar unknown to Venezuelans a month after its entry into circulation?

One day, the bolivar and the dollar were a strange couple on the streets of Venezuela, but today, with a month of life, the new digital bolivar – born from the third monetary reconversion in this century – is a great unknown for most citizens, who have already become accustomed to the almost absolute reign of the US currency.

The new Venezuelan currency was released on October 1 amid much skepticism and as part of a plan to eliminate six zeros from the one that had been in circulation until then, which went from being called a sovereign bolívar to a digital bolívar, despite operating in paper format, the same than the previous.

On the streets of Caracas, a citizen named Nurys explains to Efe that she has not seen it yet and does not know “what shape or image” of the new banknotes have, so even if she saw one, she would not be able to recognize it.

Luis García agrees with her, not far behind, who states that, in the month that has passed since it came into force, he has only been able to see a 5-bolivar digital bill “and nothing else.”

That is one of those that the Central Bank of Venezuela has promised to issue along with those of 10, 20, 50 and 100, in addition to the one-bolivar coins.

However, to access them, you need a cashier and, as García explains, “most of them are damaged and do not work.”

Added to this are the perpetual problems with the internet connection and blackouts, which make it difficult to pay with a card or through a virtual transfer system called Mobile Payment.

“What we are managing is pure dollars, as if this country were dollarized. I do not know what is happening with President Nicolás Maduro who does not take the reins. Take the reins and be strong because everyone does what they want “, he assures.

DOLLARIZED TRADES

Around them, formal and informal businesses display prices in dollars and, even if a Venezuelan wants to pay in the national currency, he will receive the price, initially, in the United States currency, and will have to conform to the official or parallel exchange rate .

“Most, for now, make more (payments) in dollars. I couldn’t tell you in bolivars, because it depends on how much the dollar is in ”, Wineska López, a saleswoman at a school fair installed on the commercial boulevard of Sabana Grande, in the heart of Caracas, tells Efe.

Adriani, an ice cream vendor, explains that between 50 and 70% of her customers pay in dollars, despite the fact that their products do not have very high costs, which favors the use of the bolivar.

The hyperinflation that began in November 2017 has progressively reduced the purchasing power of the Venezuelan currency, which, little by little, has been limited to smaller and smaller amounts.

To keep it afloat, the Venezuelan governments have carried out three currency reconversions that have eliminated 14 zeros from the currency. The first, still with Hugo Chávez in power, eliminated three zeros from the currency, which was renamed the bolívar fuerte, and came into effect on January 1, 2008.

The second, already with Nicolas Maduro in the Presidency, it eliminated five more zeros in 2018 and was a prelude to the third that came into effect a month ago, by erasing six more zeros.

The hope of this last measure is embodied by Carolina Chacón, an entrepreneur who sells chicha (a popular sweet made from rice or pasta) in a street stall.

Chacón explains that, “after the reconversion, the question (of payment) in currency has dropped a lot” and “cash in digital bolivar has increased.”

In any case, he explains that this does not facilitate his day to day “because, if the dollar goes up, everything goes up.”

“The moment the dollar rises, everything increases and, then, the bolivar brings me a little loss”, he comments.

Therein lies the main fear that the new bolivar must overcome. The mistrust it produces among citizens who, accustomed to their predecessors being devalued almost daily, fear that having it in their pocket implies daily losses.

As long as that guarantee does not exist, everything indicates that the dollar will keep its crown and the digital bolivar will be just a stone guest in Venezuelan transactions.

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