CARACAS • Venezuela's President Nicolas Maduro has announced a single exchange rate pegged to his socialist government's petro cryptocurrency, effectively devaluing it by 96 per cent in a move economists said would fan hyperinflation in the chaotic country.

In one of the biggest economic overhauls of Mr Maduro's five-year government, the former bus driver and union leader also said he would hike the minimum wage by over 30 times, boost the corporate tax rate, and increase highly subsidised gas prices in coming weeks.

"I want the country to recover and I have the formula. Trust me," Mr Maduro said in a nighttime speech broadcast on state television on Friday.

But economists expressed doubts that Venezuela's cash-strapped government, which faces US sanctions and has defaulted on its bondholders, would succeed.

Venezuelans will see their meagre salaries further eroded and companies will struggle with major increases to both taxes and the minimum wage, they said.

"Amid this aggressive devaluation and monetary expansions due to salaries and bonuses, we are expecting a much more aggressive stage of hyperinflation. All the more so in a context where the elimination of excessive money printing is not credible. The worst of all worlds," said Venezuelan economist Asdrubal Oliveros of consultancy Ecoanalitica.

The International Monetary Fund has predicted that inflation in Venezuela would hit one million per cent this year.

Mr Maduro said on Friday that one petro would equal US$60 (S$82) and have the equivalent of 360 million bolivars. That implies a new exchange rate of six million bolivars per dollar, broadly on a par with widely used black market exchange rates.

REUTERS