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Tuesday 20 August 2019

Scrapping most-used currency bill an economic triumph: Venezuelan president

A street vendor inspects the authenticity of a 100-bolivar note as people queue outside a Caracas bank (AP)
A street vendor inspects the authenticity of a 100-bolivar note as people queue outside a Caracas bank (AP)

Venezuela's president has said the sudden decision to scrap the most-used currency bill was an economic triumph over the country's enemies, even as the government sent troops and police to cities where riots and looting broke out over the measure.

In a national radio and television broadcast, Nicolas Maduro said his abrupt action had flooded the country's banks with currency deposited by Venezuelans racing to get rid of the paper bills while also devastating Colombian-border currency traders he blames for the bolivar's precipitous plunge in value against "the criminal dollar".

Last week's sudden announcement annulling all 100-bolivar notes led to massive queues at banks, a dramatic spurt in electronic payment and widespread fear by poorer people with no bank accounts and all their savings in the doomed bills, whose value had already plunged to a few pence. Cash transactions such as buying food or fuel became extremely difficult.

Mr Maduro suddenly changed course late on Saturday, announcing the 100-bolivar notes could be used until January 2.

Before that announcement, riots and looting broke out in several cities and Mr Maduro said on Sunday that more than 300 people had been detained, including several members of opposition parties.

He said the violence resulted from "a macabre" plan promoted by US President Barack Obama to extract massive quantities of 100-bolivar notes from the country and stockpile them abroad.

He said it was meant to be "the final blow of Obama, a final blow to create chaos, violence, division".

Most economists blame the country's economic woes on price controls and falling prices for the country's oil exports, as well as heavy government spending and production-crippling policies that gave Venezuelans lots of 100-bolivar notes but not enough to buy with them.

Mr Maduro said he had to extend the life of the old currency notes because saboteurs had prevented the arrival of three planes carrying newly printed, larger-denomination bills from abroad.

Disturbances continued into Saturday evening in places such as Ciudad Bolívar, where officials banned motorcycles for 48 hours and restricted overnight car and pedestrian traffic. Bolivar state governor Francisco Rangel Gomez said 3,200 police were sent into the streets to ensure order and he said 262 people had been arrested in the state.

Eight hundred police and troops were sent to the town of El Callao, where mayor Coromoto Lugo said a youth was killed, 25 businesses were looted and 40 people were injured in the disturbances.

In the south-western town of La Fria, officials said city hall was burned during rioting on Saturday.


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