Venezuela to swap highest denomination banknotes for coins

December 12, 2016 2:33 am Published by

Venezuela to swap highest denomination banknotes for coins

Picture of 100-bolivar bills, VenezuelaImage copyright
EPA

Image caption

The bills depict the image of Simon Bolivar, the hero of Venezuelan independence

The Venezuelan government has announced that it will replace the country’s highest-denomination banknotes with coins within 72 hours.

It hopes this will help to combat smuggling and tackle the chronic shortage of food and other basic items.

President Nicolas Maduro says gangs that operate in border areas will not have time to repatriate the money.

The 100-bolivar bill has lost most of its value over the past few years and is now worth about 2 cents (£0.015).

Venezuela, which is facing a serious economic and political crisis, has one of the world’s highest inflation rates.

“I have given the orders to close all land, maritime and air possibilities so those bills taken out can’t be returned and they’re stuck with their fraud abroad,” said Mr Maduro on television.

Earlier this month, the central bank said that six new bills ranging from 500 to 20,000 bolivars would come into circulation on 15 December.

The government last published figures for inflation in December 2015, putting it at 180%, but the International Monetary Fund (IMF) estimates that next year’s prices will rise by more than 2,000%.

In India, a similar move to scrap high-value bank notes last month has caused major disruption.

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This post was written by FSB News