Venezuela hikes minimum wage 50% as hyperinflation rages

How did Venezuela get into such deep debt?
How did Venezuela get into such deep debt?

Venezuela's minimum wage keeps rocketing skyward as the country grapples with insane levels of inflation.

President Nicolas Maduro hiked the minimum wage another 50% on Sunday, the fifth increase in the past year. That sounds like a big raise, but it pales in comparison with the dizzying increases in prices that have made food too expensive for many Venezuelans.

Inflation is expected to surge to 1,660% this year and 2,880% next year, according to forecasts by the International Monetary Fund.

Maduro on Sunday repeated his claim that his country is the victim of an economic war waged by his opponents, according to state-run news agency AVN.

Related: Venezuela crisis: I flew to U.S. to buy toilet paper

The government has resorted to increasingly extreme measures to try to combat the economic chaos, which has left people facing severe shortages of food and medicines.

The country's plunging currency and runaway inflation have made its banknotes virtually worthless. Maduro announced plans last month to print new bills in far higher denominations to replace the old ones, including a 20,000 bolivar note (200 times bigger than the largest note previously in circulation).

Related: These currencies got crushed in 2016

But the currency exchange got off to a chaotic start, with the new notes failing to arrive on time and huge lines forming at banks.

Venezuela joined a "Rogues Gallery" of countries suffering from hyperinflation in December, according to Steve Hanke and Charles Bushnell, two economists who track the phenomenon.

Maduro said Sunday that the minimum wage increase was an effort to protect the incomes of Venezuelan citizens. It follows a hike of 40% less than three months ago.

Related: Venezuela is printing a 20,000 bolivar note

After the latest raise, the minimum wage stands at 40,638 bolivars a month. That works out at just $12.14, according to the popular, unofficial exchange rate on DolarToday.com.

If you add in food stamps, the Venezuelan wage rises to 104,358 bolivars. That's still only $31.17.

Food stamps and worker bonuses make up most of workers' total pay in Venezuela.

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