The stock market in this country has risen more than 70 times this year, but shareholders have lost money.
However, investors in Venezuela are far behind A-share investors. Since the beginning of 2065438+2008, the exchange rate of Venezuela (Bolivarian Republic of) has been depreciating against the US dollar. For example, buying a cup of coffee in Venezuela at the beginning of the year was about 23 million bolivar, and recently it cost more than 2 million bolivar.
According to the report released by the Finance and Economic Development Committee of Venezuela's National Assembly in May, compared with the same period of 20 17, Venezuela's inflation rate reached 13779% in April of 20 18, while the International Monetary Fund (IMF) predicted that Venezuela's inflation rate would exceed/kloc-0 in 20 18.
The situation may deteriorate further. In the latest Latin American economic forecast, the International Monetary Fund pointed out that Venezuela's inflation will reach the level of "annual growth 1 10,000 times" by the end of this year. Alejandro Werner, head of the Western Hemisphere Affairs Department of the IMF, said, "We predict that by the end of 20 1000000%, Venezuela's inflation rate will soar to 100000%, which shows that its economic situation is similar to that of Germany in 1923 or Zimbabwe around 2008.
Miguel octavio, head of BBO Financial, an asset management agency, has previously said that Venezuelan investors regard the stock market as a way to hedge against currency depreciation.
But this hedge obviously lost its meaning.
In order to reform this phenomenon, Venezuelan President Nicolá s Maduro Moros announced on July 26th local time that he would carry out a new currency reform, aiming at "removing five zeros in the currency". The new currency will start to circulate from August 2065438 to August 2008. Although the monetary reform that should have been carried out in June was postponed twice, the previous small goal was to remove three zeros.
Specifically, the current "bolívarfuerte" banknotes will stop circulating from 65,438+0,000 pounds, and will be replaced by new "bolívarsoberano" banknotes-from 2 pounds to 500 pounds. In addition, Venezuela also wants to mint new coins. Maduro announced that the upcoming sovereign bolivar will be changed from the original planned strong bolivar equal to 1000 current currency to strong bolivar equal to 100000.
After this reform, the price of a cup of coffee will quickly drop to 20 bolivar, but this structural reform measure that does not fundamentally solve the problem of hyperinflation is short-sighted.
Asdrubal Oliveros, an economist at Venezuelan consulting firm Ecoanalitica, told the media, "Although it is necessary to eliminate the number of zero, it is not enough, because the fundamental problem of hyperinflation, that is, the serious economic imbalance, has not been solved." He pointed out that in the past 20 years, the distorted economic policy led by the state and the economic situation of excessive expansion of money supply have been changing.
In his speech that day, Maduro also said that the new currency will "anchor" oil and will try to establish a sovereign cryptocurrency, but he did not elaborate on this.