Article

2016-12-17 Caribbean-Latin America

Venezuela taking 100-bolivar notes out of circulation

Venezuela withdrew its 100-bolivar notes on Thursday, promising to introduce new banknotes to replace the bill that makes up almost half of the country’s circulating bank notes, just 72 hours after the policy was announced by President Nicolas Maduro. The switch is an attempt by Mr. Maduro’s government to tamp down inflation rates, estimated at around 500 percent, by targeting smugglers who traffic state-subsidized goods on the black market, which has mushroomed as the rest of the oil-based economy has fallen. Maduro accuses Colombia-based smugglers of hoarding bolivars outside of the country in order to buoy the black market, part of a larger effort he describes as an “economic war.”

Critics say the government’s longstanding price and currency controls are the real root of the economic crisis, and call the campaign against black marketeers a distraction. The campaign has aggravated Venezuela’s own version of an ongoing border drama with Colombia, one that has flared at times into xenophobia and put the spotlight on the cross-border trade of household goods by criminal mafias.

The conflict has played out most acutely in the border state of Tachira, where ties with Colombia have historically been stronger than with Caracas, as The Christian Science Monitor reported in 2014. Since an August 2015 attack that wounded three Venezuelan soldiers – an attack that Maduro blamed on right-wing paramilitary groups – the border with Colombia periodically been mostly closed, with restrictions lifted to allow locals to stock up on basic supplies, as Al Jazeera noted in September.

In announcing the currency swap this week, Maduro also extended the closure of the Colombian and Brazilian borders for another 72 hours to keep hoarded cash from re-entering the country. And he announced the discovery of a warehouse near the Colombian border that was being used by an unidentified NGO to store contraband bills, according to Univision.

The change has so far proven chaotic for many Venezuelans, who lined up at banks to deposit bills that would soon become worthless but were unable to take out new bills that haven’t yet been received by many banks.

"Many countries in the world have changed their currencies but afforded enough time to exchange the old notes with new ones," said a Caracas man identified as Carlos by the Guardian, in an interview with the site. "Think of Europe and the euro. And when [late ex-president Hugo] Chávez changed the Venezuelan bolivar to Strong bolivars both currencies could be used for several years."

Posted by Pappy 2016-12-17 00:00|| || Front Page|| [14 views ] Top

#1 What will they do for toilet paper?

Posted by gorb 2016-12-17 13:12|| 2016-12-17 13:12|| Front Page Top

#2 100 bolivar notes

Posted by Grins Snese4215 2016-12-17 17:01|| 2016-12-17 17:01|| Front Page Top

#3 Venezuela will get worse and worse, until some army or other intervenes.

Posted by phil_b 2016-12-17 17:56|| 2016-12-17 17:56|| Front Page Top