AUDIE CORNISH, HOST:
A cup of coffee in Venezuela would've cost 6 million bolivars last week, about one U.S. dollar. Today, it cost 60 bolivars, also equal to about one U.S. dollar. This is one of President Nicolas Maduro's answers to try to stop hyperinflation in his country. He changed the currency by just lopping off five zeros from new bills. It's confusing, and it raises a lot of questions about what this means going forward.
Reporter John Otis spent the day with Venezuelans dealing with the new currency. He joins us now.
John, just help us understand how the currency looks or is different.
JOHN OTIS, BYLINE: Yeah, sure. I mean, this is really just a cosmetic change. All the bills look exactly the same with the same portraits of the founding fathers and ex-presidents and so forth, but they've just taken off a lot of the zeros. So in other words, a 100,000 bolivar note from last week - this week, it'll have the zeros removed, and it'll be worth, you know, one bolivar.
CORNISH: How are Venezuelans reacting to this?
OTIS: Well, you know, I was just in the town of San Antonio del Tachira, which is on the border with Colombia. And most people were pretty skeptical. The reason is that President Maduro was the one who got basically Venezuela into this terrible economic crisis of food shortages and prices doubling every few weeks. So they're asking why should we trust him to get us out of this mess?
One Venezuelan, who obviously didn't really like Maduro very much, said instead of changing the currency what we really need to do is change the government.
CORNISH: What does it look like in terms of daily transactions? I mean, what - how are people using it?
OTIS: Well, it was a little weird because it was supposed to be rolled out today - this new currency - but it was quite hard to find. A lot of the ATM machines in town were empty, so people were still paying for things with the old bolivars, which are still being accepted. And merchants had to break out calculators to figure out the old - you know, the prices in the old money and in the new money. But people's bank accounts have been updated to reflect this new currency. But even that could be a little bit shocking.
I followed one guy into a bank to check the balance of his savings account, for example, and he used to have 450 million of the old bolivars. And his jaw just kind of dropped, you know, when he saw that in the new bolivars, you know, he was down to 4,500.
CORNISH: Can people still use credit cards under this system?
OTIS: Yeah, they can. In fact, you know, credit cards is a way that most people pay for things because there's also - you know, there's food shortages. There's medicine shortages. And there's also been cash shortages due to this massive hyperinflation, which the IMF says could hit 1 million percent this year.
CORNISH: We've also heard about this government issuing a new currency, a kind of cryptocurrency. It just sounds like a lot of different monetary policies coming from the Maduro government all at once. Are things a shambles?
OTIS: Yeah, I mean, all of this confusion is one of the reasons why people don't think these new economic measures and the introduction of a new currency is really going to fix the economy because, I mean, economic stability - you have to have confidence.
And President Maduro has just been throwing out new economic policies right and left. You know, for instance, he wants to base this new money that he just introduced on a cryptocurrency - a new cryptocurrency that is declared illegal by the U.S - and is based on oil that Venezuela hasn't even pumped yet. So it's all just very confusing, and that leads to instability in a place that's been unstable for a very long time.
CORNISH: That's reporter John Otis. He spoke to us from the Colombian border with Venezuela.
Thank you for your reporting, John.
OTIS: Thank you. Transcript provided by NPR, Copyright NPR.