Nicolas Maduro, the president of Venezuela, has reportedly raised the reference value of the Petro, the South American country’s highly controversial national digital currency.
The value of the state-backed cryptocurrency has been adjusted according to the the nation’s current economic crisis: hyperinflation – the Venezuelan president noted in a tweet from his official Twitter account (on November 30th, 2018).
Petro Rate Fixed At 9,000 Bolivars
Latin American news channel TeleSur revealed that Maduro had first announced the updated Petro rate on November 29th. The new value of the Petro is now fixed at 9,000 bolivars, up from the previous rate of 3,600 bolivars.
In an official announcement from Caracas on the same day, Maduro gave an order to increase the nation’s monthly minimum wage by 150% – which is notably the sixth time this year that the Venezuelan president has had to increase the minimum wage due to hyperinflation.
In total, Venezuela’s minimum wage has been adjusted 25 times since Maduro assumed office in March of 2013. In addition to changing the Petro’s rate, the president devalued Dicom, the country’s official exchange rate.
Venezuela’s Bolivar Has Dropped By 40%
The redenominated bolivar has also dropped 40% against the USD – from 96.84 bolivars to a dollar to currently 171.67.
Venezuelan economist, Leonardo Buniak, referred to the move as “very bad news for Venezuelans.” Buniak thinks that the country’s government does not have adequate resources to support the wage increase. This, according to the economist will result in another price increase, and also lead to more hyperinflation.
“To anchor the bolivar to Petro is equal to anchoring it to nothing.”
Very Low Revenue From Oil Production
Venezuela’s crippling economic crisis may partially be attributed to a significant decline in revenue from oil production. Bloomberg’s Cafe Con Leche Index, which monitors the hyperinflation rate in Venezuela, shows that the annual inflation rate in the South American nation has increased exponentially by 200,000 percent.
In August, Maduro had made the Petro an official unit of account in the country, and had tried to tie local salaries and create a pricing system for the country’s products and services to what he claims is an oil-backed national digital currency.
Petro’s official sale began in November, with Maduro and many of the nation’s top officials claiming to have purchased the crypto through official websites.
At present, the Petro is not available on any reputable or recognized crypto asset exchanges, and it has no crypto trading pairs.