Maduro has a plan to fix Venezuela’s inflation — which may make things worse

By Rachelle Krygier
Anthony Faiola, Bureau chief
August 19 at 5:02 PM

CARACAS, Venezuela — With President Nicolás Maduro’s radical new plan to curb runaway inflation poised to come into effect Monday, Venezuelans braced for what experts say could soon be a deeper plunge into economic chaos for this broken South American nation.

Maduro late Friday outlined a dramatic effort to curb inflation that has been spiralling toward 1 million percent, raising the minimum wage by more than 3,000 percent and officially devaluing the already nearly worthless bolívar by more than 90 percent. He additionally said in a televised address that the currency, which was already scheduled to shed five zeros Monday, would now be backed by Venezuela’s petro, a virtual currency linked to oil reserves that the government created in February and that experts have called a sham.

But analysts said the plan failed to address the fundamental problems causing inflation – the willy-nilly minting of bolívares, collapsing oil output and a complete lack of confidence in the government.

Few Venezuelans appear to have faith in the fix, with many expressing broad fears that it may only make the situation worse. In the capital, Caracas, residents rushed to supermarkets and gas stations on a gloomy Sunday, desperate to stock up on basics. Some shop owners – unsure of what to charge their customers – fretted over whether to open their doors this week at all.

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