Venezuelan President Nicolas Maduro has announced that the country's largest banknote, the 100 bolivar note will cease to exist and be removed from circulation.
Venezuelan President Nicolas Maduro has announced that the country’s largest banknote, the 100 bolivar note will cease to exist and be removed from circulation. This move has been directed to stop the hoarding of cash by the mafia and smugglers. According to the government, the criminals working near the border will not get the time to send the notes anywhere. However, critics have reportedly dismissed the policy saying that it is a desperate attempt to solve economic problems in the country. Venezuela is in the middle of a great economic crisis and reportedly has the highest inflation in the world. According to the new rule banknotes and coins will be issued with values almost 200 times the 100 bolivar note. Currently, the value of the 100 bolivar note is too less, almost 2-3 US cents, which is not enough to buy even a small chocolate.
According to Maduro, the demonetisation was important as it was found by the government that billions of notes were stashed away by criminals in Columbia and Brazil. He reportedly also accused the banks of being partners in crime. Maduro ordered that all land, water, air movements be stopped so that the notes could not be returned to the country and the fraud will be restricted to outside Venezuela. The country’s oil exports have been hit by low prices which have resulted in a shortage of dollars. This has led to a huge rise in prices of basic necessities in Venezuela. According to the IMF, the inflation rates may hit 475 percent by the end of 2016 and may rise to 1000 percent by 2017.
The opposition meanwhile blames the government, but President Maduro believes that the crisis is backed by the US and its ‘capitalist conspiracy’. Meanwhile, according to reports, Venezuela’s central bank had earlier said that 6 new notes will be in circulation from December. The value of these notes will be from 500 to 20 thousand bolivars.
(with agency inputs)