CARACAS, Venezuela �� Many Venezuelan shops closed as a precaution as confusion reigned Saturday following measures announced by President Nicolas Maduro aimed at fighting an economic crisis in the oil-exporting nation.
The government will enact a drastic currency devaluation and a tax increase, and will raise gasoline prices. A new version of the bolivar will trade roughly in line with where the black market was, and the government will raise the minimum wage more than 3,000 percent �� a level that still only equates to $30 a month.
Tying Venezuela's currency to the value of its cryptocurrency, known as the petro, effectively amounts to a 95 percent devaluation compared with last week's central bank foreign exchange auction results.
The new currency, set to enter circulation on Monday, will be called the sovereign bolivar and will be based on the petro, now valued at $60, or 3,600 sovereign bolivars. The minimum wage will be set at 1,800 sovereign bolivars, Maduro said. The petro, which will fluctuate, will be used to set prices for goods.
Henkel Garcia, director of the Caracas consultancy Econometrica, said the announcements were confusing. "This series of measures is a mix of incoherent and contradictory ideas," he said. "It is a worrying contraption that generates a lot of uncertainty about how it will be executed."
Separately, Information Minister Jorge Rodriguez said Saturday that the government will open 300 currency exchange kiosks in hotels, airports and shopping malls as part of an attempt supersede the country's black market. Maduro said Friday that the central bank will increase the frequency of weekly foreign exchange auctions to three, and eventually five.
On Saturday, shoppers arrived at an eastern Caracas supermarket to stock up on goods before prices rise even further, but a security guard shooed them away.
"The supermarket is now closed, the shelves are almost empty because of the number of people who came early today," the guard, identifying himself only as Luis, said as he tried to manage the crowd. Some gas stations were closed and others had long lines.
Maduro did not offer more details Friday on a gasoline price system, saying that he wants a plan that includes direct subsidies to registered public transport operators and individual vehicle owners. Those not registered won't receive a subsidy and will have to pay international prices. He extended the period for drivers to register for the subsidy until Aug. 30.
Venezuela would save $10 billion through the new fuel price system, Maduro said. The government would cover the minimum wage increase at small and medium-size companies for 90 days, he said.
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(Orozco reported from Mexico City.)
