Venezuela to remove five zeroes from currency

[CARACAS] Venezuelan President Nicolas Maduro on Wednesday announced the removal of five zeroes from the country's currency - two more than originally planned - amid hyperinflation the IMF said could reach one million per cent this year.

Mr Maduro announced in a cabinet meeting that an "economic recovery" programme involving "monetary reconversion" would commence August 20.

He previously said new bolivar bills with three zeroes fewer would enter circulation on August 4 - a measure already pushed back from June 4 at the request of banks.

The measure, according to Mr Maduro, seeks to "protect" local currency.

"Five zeroes fewer, so that we may have a new, stable financial and monetary system," he said.

Mr Maduro blames hyperinflation on what he calls a "war" against the currency - which is in serious shortage - including exporting it to other countries such as neighbouring Colombia.

But the IMF, in forecasting one million per cent inflation by year's end, said it expects Venezuela's to contract by 18 per cent this year amid falling oil production.

It also pointed to economic "distortions," including printing money to finance the government.

AFP