Saturday 17 February 2018

Venezuelans scramble as most-used banknote becomes void

A shop displays a message posted in Spanish:
A shop displays a message posted in Spanish: "Not accepting the 100 bank note." (AP)

Venezuela became a country mostly without cash on Friday, sparking scattered protests and looting around the country as people fumed at having their already-limited purchasing power cut off almost entirely.

As the nation's most widely used banknote went out of circulation, the higher-denomination bills that were supposed to replace the 100 bolivar note had not yet arrived at banks or ATMs.

That forced people to rely on credit cards and bank transfers or to try to make purchases with bundles of hard-to-find smaller notes often worth less than a penny each.

Indignation at having to deal with an economy even more paralysed than usual sparked social unrest. Police put down a small protest outside a bank building in the large western city of Maracaibo with several arrests, and businesses were looted in the remote eastern state of Bolivar.

In Caracas, some people passed the day banging on pots and cursing the government's apparent lack of planning.

President Nicolas Maduro made a surprise announcement on Sunday that the 100 bolivar note would go out of circulation by the week's end amid the world's highest inflation.

He also temporarily closed the border with Colombia and Brazil, and then on Thursday night extended the border closure for another 72 hours.

Maduro said the closure was needed to thwart "mafias" who hoard bolivars.

Critics mocked the notion that gangsters would choose to keep their wealth in the world's fastest-devaluing currency. The 100 bolivar note, until now the country's largest denomination, is worth little more than one penny, down from around nine pence at the start of the year.

The embattled socialist president held up a new 500 bolivar bill on his television show Thursday, promising the new banknotes would soon be in wide circulation and offering to temporarily cut sales tax for credit card transactions. But on Friday, ATMs were still issuing only the now-worthless 100 bolivar notes.

Maduro also said the government has begun to circulate new 100, 50, and 10 bolivar coins, but few seem to have reached the public.

Venezuelans waited in lines hundreds of people long all week to deposit their cash. On Thursday, shopkeepers put up signs saying 100 bolivar bills would no longer be accepted.

That meant many people looking to buy groceries or take taxis were out of luck, as banks had run out of lower-denomination bills like 50 and 20 bolivar notes during the week, and had not yet received the higher-denomination replacements.


Press Association

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