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Venezuela debuts new banknotes

January 17, 2017

Venezuela released larger denomination banknotes as the country grapples with heavy inflation. President Nicolas Maduro set out last month to rid Veneuela of the 100-bolivar note.

Venezuela | Einführung neuer Banknoten in Venezuela
Image: Getty Images/AFP/J. Barreto

The Venezuelan government's release of larger denomination banknotes to its citizens comes weeks behind schedule.

The new notes, valued between 500 and 20,000 bolivars, are meant to replace the 100-bolivar note, which was the largest denomination of currency available in Venezuela before Monday. Venezuelans often had to carry large amounts of 100 bolivar notes, worth just a few US cents, to go shopping.

President Maduro has said the 100-bolivar notes are hoarded by "mafias," but he extended the deadline for the note to stay legal tender - until February 20. This is the third time Maduro has extended the deadline.

Maduro has blamed the current economic crisis on the US, calling it a capitalist conspiracy within the socialist nation. The opposition blames Maduro's policies for the crisis and is seeking a popular vote to remove Maduro from office.

Limited impact of new notes

A massive increase in inflation has made the smaller banknotes virtually worthless in the South American country. The International Monetary Fund (IMF) has warned inflation in Venezuela will rise to 1,660 percent in 2017, considered one of the highest inflation rates in the world.

Economist Anabella Abadi told French news agency AFP the new banknotes "make Venezuelans' lives easier, but [they] will not rein in inflation."

"Coins and bills in the country only represent 8 percent of total liquidity. The greatest pressure is from electronic transactions," said Abadi.

kbd/gsw (AFP, AP)