Venezuela to remove five zeroes from ailing currency

In this file photo taken on June 20, 2018 a man counts 1000-Bolivar-bills to buy groceries at the municipal market of Coche, a neighbourhood of Caracas. (AFP)
Updated 26 July 2018
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Venezuela to remove five zeroes from ailing currency

CARACAS: Venezuela will remove five zeroes from the bolivar currency rather than the three zeroes originally planned, President Nicolas Maduro said on Wednesday, in an effort to keep up with inflation projected to reach 1 million percent this year.
The OPEC nation’s economy has been steadily collapsing since the 2014 crash of oil prices left it unable to maintain its socialist economic system that for years provided lavish subsidies while enforcing strict price controls.
Annual inflation in June topped 46,000 percent, according to the opposition-run Congress. The IMF said this week it could hit seven digits this year, putting it on par with the crises of Zimbabwe in the 2000s and Germany in the 1920s.
“The monetary reconversion will start on Aug. 20,” Maduro said in a televised broadcast, showing new bills that are to be released next month.
He said the overhaul would tie the bolivar to the recently launched state-backed cryptocurrency called the petro, without offering details.
Cryptocurrency experts have said the petro suffers from a lack of credibility because of a lack of confidence in Maduro’s government and the mismanagement of the country’s existing national currency.
The government has said it is the victim of an “economic war” led by opposition leaders with the help of Washington, which last year levied several rounds of sanctions against Maduro’s administration and a group of top officials.
The country’s high inflation rate has made it nearly impossible to obtain cash.
Venezuela’s minimum wage is now about the equivalent of $1 a month, which has left citizens across the country unable to eat properly or obtain basic medical care — fueling an exodus of Venezuelans seeking to escape the economic crisis.
The government had been prepared to cut three zeroes off the currency in June but postponed the measure at the request of banking industry leaders who said the financial system was not ready for the measure.
Maduro on Wednesday proposed an overhaul to the currency crimes law in order to improve the flow of foreign investments.
Economists routinely identify the exchange controls as a major hindrance to economic growth. The issue will be taken up by the country’s all-powerful Constituent Assembly, Maduro said.
He also said he was transferring a concession bloc of the vast Orinoco heavy oil belt to the central bank, which he said would help shore up the bank’s international reserves.


Turkey set to begin oil and gas drilling off Cyprus

Updated 21 February 2019
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Turkey set to begin oil and gas drilling off Cyprus

  • “In the coming days we will start drilling with two ships around Cyprus,” Turkish foreign minister said
  • Turkey and the Cypriot government have overlapping claims of jurisdiction in the eastern Mediterranean

ISTANBUL: Turkey will begin drilling for oil and gas near Cyprus in coming days, state-owned news agency Anadolu reported Foreign Minister Mevlut Cavusoglu saying on Thursday, a move that could stoke tensions with neighboring Cyprus and Greece.
Turkey and the internationally recognized Greek Cypriot government have overlapping claims of jurisdiction for offshore oil and gas research in the eastern Mediterranean, a region thought to be rich in natural gas.
“In the coming days we will start drilling with two ships around Cyprus,” Cavusoglu was quoted as saying in a speech to a business conference in western Turkey’s Aydin province.
“Let those who come to the region from far away, and their companies, see that nothing can be done in that region without us. Nothing at all can be done in the Mediterranean without Turkey, we will not allow that,” Cavusoglu said.
Turkey launched its first drillship “Fatih” in October to drill off the coast of Turkey’s southern Antalya province. It said a second ship that it purchased would operate in the Black Sea, but was diverted to the Cyprus area.
Breakaway north Cyprus, which is supported by Turkey, says any offshore wealth also belongs to them, as partners in the establishment of the Republic of Cyprus in 1960.
The island was divided in 1974 after a Turkish invasion triggered by a brief Greek-inspired coup. Countless peacemaking endeavours have failed, and offshore wealth has increasingly complicated peace negotiations, with Greek Cypriots saying the matter is not up for discussion.