Venezuela has begun using a new currency system in an effort to slow the country's rate of inflation.

The "strong bolivar" began circulating on January 1. The money was created by taking three trailing zeroes off the value of the former currency, the bolivar.

Officials say the new currency will simplify transactions and lower inflation. Venezuela's inflation rate in 2007 was more than 20 percent, the highest in the region.

Critics say they doubt the new currency will stabilize rising prices.

The official exchange rate is 2.15 new bolivars to the dollar. But the black market exchange rate is more than five new bolivars to the dollar.

The Venezuelan government is also re-introducing the locha, a coin worth one eighth of a strong bolivar. The locha has not been in circulation since the 1970's.

Some information for this report was provided by AP and Bloomberg.