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Venezuela to issue bigger notes amid high inflation

December 4, 2016

Venezuela's central bank has said it will issue higher-denominated currency notes mid-December. The South American country is facing an acute economic crisis as its inflation is expected to surpass four digits next year.

Bolivares Venezuela Geldscheine
Image: picture-alliance/dpa/M. Gutierrez

Venezuela: World's most miserable economy

Venezuela will introduce six new bills ranging from 500 to 20,000 bolivars, the OPEC nation's central bank said in a statement on Sunday.

Currently, the largest-denominated Venezuelan note is 100 bolivars (9.4 euros), which is worth just around two US cents on the black market. A two-liter soft drink bottle can cost 25 times that amount.

The socialist-run economy is on the verge of collapse as its currency has lost 67 percent of its value on the black market, falling to 4,587 bolivars per US dollar, according to Dollar Today, a tracking agency.

Inflation is already in triple digits - the world's highest - and is likely to surpass four digits next year, according to the International Monetary Fund. The country's ATMs are almost without cash and its credit card payment system froze up for several hours on Friday.

Explaining the rationale behind the decision to introduce new notes, the central bank said it will "make the payments system more efficient, facilitate commercial transactions and minimize the costs of production, replacement and transfer … which will translate into benefits for banking, trade and the general population."

Three coins of smaller value will also be issued by the government.

President Nicolas Maduro blamed the "mafias" in neighboring Colombia for the crisis, saying they are trying to carry out an "economic coup" against his country. He also said the country's opposition has triggered the crisis with the help from Washington.

"The right wing wants to impose on Venezuela a parallel exchange rate from an account in Miami, and from that account take the dollar to a disastrously crazy level," Maduro said in a televised speech.

Protests against the Venezuelan government continue

shs/rc  (Reuters, AP)