Venezuela currency devaluation: What is happening in Venezuela? What is the population?

Part of a broad economic plan to get a handle on hyperinflation, Mr Maduro hopes this phase will show “fiscal discipline” and end the excessive money printing that has been a regular feature of recent years.

Today, the country with a population of 31.5 million were given a national holiday to usher in the first day of the new pricing plan for the stricken economy.

But his critics have called it just another socialist policy bound to fail and push the country deeper into chaos.

Economists say the plan, which was announced last Friday, is likely to escalate the crisis facing the once-thriving nation that is now suffering from severe product shortages and seeing thousands of citizens fleeing for other South American countries.

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What is happening?

The country has begun issuing new banknotes called the sovereign bolivar – named to distinguish it from the strong bolivar – with five zeros slashed.

The old 100 bolivar notes are no longer legal tender, and those in denominations of 1,000 and above will stay in circulation for the time being.

The new sovereign bolivar is anchored to Venezuela’s widely discredited cryptocurrency, the petro, causing further alarm.

Each petro will now be worth £47, based on a price of a barrel of Venezuelan oil.

That will be 3,600 sovereign bolivars in the new currency, which signals a massive devaluation.

The minimum wage has also been fixed at half a petro from today, more than 34 times the previous level.

But anchoring the bolivar to the petro is unnerving many.

The cryptocurrency has been called a “scam,” with one economist saying: “Anchoring the bolivar to the petro is anchoring it to nothing.”

This isn’t the first time this method has been tried. In 2008, Mr Maduro’s predecesor Hugo Chavez shaved three zeros off the bolivar, with no impact on rampant hyperinflation.

Why is Venezuela doing this?

As a result of excessive money printing in recent years, Venezuela has seen alarming levels of hyperinflation, which has pushed up prices to astronomical levels.

The country, now in the fourth year of recession, is in crisis as basic goods and public services are paralysed.

One man told Reuters today as he tried to find an open bank: “There’s no money, there’s no water, there’s no electricity – there’s nothing.”

According to the International Monetary Fund, inflation will reach a staggering 1,000,000 percent this year.

Venezuela’s fiscal deficit is almost 20 percent of GDP and it is also struggling with an external debt of $150bn (£118bn).

Mr Maduro, re-elected to a second term in May in a vote widely condemned as rigged, says his government is the victim of an “economic war” led by political adversaries with the help of Washington, accusing the United States of seeking to overthrow him. An allegation the US, which has called Mr Maduro a dictator and imposed financial sanctions against his government, has denied.

The ongoing crisis has seen scores of Venezuelans flocking to other countries in hope of a better life.

The United Nations says 2.3 million Venezuelans have fled since 2014.

William Spindler, spokesman for the UN High Commissioner for Refugees, has described the exodus as “one of Latin America’s largest mass-population movements in history”.

Most are heading to Peru, Ecuador and Colombia in hopes of finding work and applying for asylum.

Ecuador has declared a state of emergency as more than half a million people have flooding the borders since January.

Tensions are rising between citizens and Venezuelan refugees, with a makeshift camp in Brazil being set ablaze over the weekend, pushing the Venezuelans back across the border.

Authorities there have announced that they will follow the lead of Ecuador and require Venezuelans reaching the border to enter with a passport, a document that is increasingly difficult to obtain in Venezuela.