The E-Sylum:  Volume 11, Number 1, January 6, 2008, Article 24

VENEZUELA REVIVES THE LOCHA COIN DENOMINATION

[An article published New Year's Day on Bloomberg.com
discusses the revival of an old Spanish-based coin
denomination in Venezuela - the locha.  Here are some
excerpts.  -Editor]

Venezuelan President Hugo Chavez's latest effort to reduce
Latin America's highest inflation rate revives a coin rooted
in Venezuela's colonial past: the ``locha,'' based on the
old Spanish ``piece of eight.''

The locha is worth 12.5 cents, or an eighth of a new ``strong
bolivar,'' a currency that debuted today with seven new coins
and six new bills. Chavez says the new bolivar, created by
lopping three zeros off the old currency, will simplify
pricing and help slow consumer price increases.

``During the 1940s and through the 1960s, the locha was one
of the most popular coins,'' Armando Leon, a director of the
central bank, said in an interview in Caracas. ``It circulated
during a very long period of stability.''

Chavez may be bringing back the locha to restore confidence
in the economy amid the fastest inflation in almost five
years and shortages of milk, eggs and sugar.

The locha was an adaptation of a 19th-century coin called
the ochava, Leon said. Both were derived from the ``piece
of eight'' monetary system imposed by Spanish colonial rulers.

The locha used to cover the cost of a bus ride and a loaf
of bread, said Enrique Bernal, a professor at the Universidad
Central de Venezuela, who has published a magazine on coin
collecting for the Venezuelan Numismatic Society since 1980.

It was so common that people used it to measure food,
ordering cheese by the locha, he said.

Some shoppers insist the locha will mean higher, rather
than lower, prices.

``The store is always going to round up,'' said William
Vivera, 34, an electrician in Caracas. ``The locha's
going to be hard to manage for consumers and for stores.''

To read the complete article, see:
Full Story

  Wayne Homren, Editor

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