The new banknote will be worth just 52 U.S. cents at the current official exchange rate. Interannual inflation was running at 2,665% as of January, according to the central bank.
The once-prosperous OPEC nation’s economy has been in a tailspin for the past seven years, spurred by a collapse in oil prices that led to a drop in imports and a gaping fiscal deficit, prompting the central bank to print more bolivars.
“These new bills will complement and optimize the current denominations, to meet the requirements of the national economy,” the central bank said in a statement.
In addition to the 1-million-bolivar banknote, the central bank said it will introduce 200,000- and 500,000-bolivar banknotes to circulate alongside the 10,000-, 20,000-, and 50,000-bolivar bills currently in circulation.
Years of hyperinflation and erosion of the bolivar’s value have led Venezuelans to use U.S. dollar banknotes for many everyday transactions. President Nicolas Maduro has called the informal dollarization process an “escape valve” while blaming U.S. sanctions for the economy’s woes.
Critics say the root of Venezuela’s economic collapse lies in the interventionist policies of Maduro and his socialist predecessor and mentor, Hugo Chavez. (Reporting by Deisy Buitrago Writing by Luc Cohen Editing by Leslie Adler)