BREAKING NEWS

Venezuela reinstates the 100-bolivar banknote

Venezuelan President Nicolas Maduro has suspended the withdrawal of the country's most widely-used banknote after higher-denomination notes failed to arrive in time.

Now Reading:

Venezuela reinstates the 100-bolivar banknote

Text size Aa Aa



Venezuelan President Nicolas Maduro has suspended the withdrawal of the country’s most widely-used banknote.

Maduro said the 100-bolivar bill will be reinstated after higher-denomination notes failed to arrive in time.

The change in policy comes after days of cash shortages, clashes with police and looting.

Speaking from the presidential palace, Maduro blamed a “sabotage” campaign by enemies abroad for the delayed arrival of three planes carrying the new 500, 2,000 and 20,000 bolivar notes.

Officially out of use since Thursday, the 100 bolivar bill is now back in use until early January.

“I have decided to extend the validity of the 100 bolivar bill for circulation, commercialisation and legal economic activity within the Venezuelan border until January 2, 2017, as of this moment,” Maduro said.



Why has Maduro done this?



The sudden policy u-turn follows days of chaos across Venezuela.

In addition to looting, the lack of viable currency sparked huge queues at banks as people desperately tried to exchange or deposit the worthless cash notes.

The 54-year-old successor to Hugo Chavez, whose popularity has plunged during three years of recession, says domestic political foes supported by the US are sabotaging the economy to undermine his government.

Maduro had justified the 100 bolivar note’s elimination as a way of strangling the mafia and smugglers on the border with Colombia.

He has also closed border crossing with Colombia and Brazil until January 2.

“I am extending the closure of the border with Brazil and Colombia until January 2, reinforcing all the security measures and calmly establishing a humanitarian and family zone,” he added.

Speaking from the presidential palace, Maduro blamed a “sabotage” campaign by enemies abroad for the delayed arrival of three planes carrying the new 500, 2,000 and 20,000 bolivar notes.

“One plane, contracted and paid for by Venezuela, was told in flight to change direction and go to another country,” Maduro said, without specifying who had given the orders.

“Another was refused flyover permission.”



Queues and looting



The suprise pulling of the 100 bolivar note from circulation earlier this week – before new, larger bills were available – led to long lines at banks, looting of some shops, anti-government protests and at least one death.

Many Venezuelans had found themselves without the means to pay for food, petrol or Christmas preparations.



Venezuela’s economic crisis



Venezuela is already reeling from a profound economic crisis.

Around 40% of Venezuelans do not have bank accounts and so cannot use electronic transactions as an alternative to cash.

The country also has the world’s highest rate of inflation.



What the opposition say



The Democratic Unity opposition coalition say the socialist leader should resign for incompetence and for inflicting yet more suffering on Venezuelans.

“We have a government which is utterly stupid and destructive in economic management, whose only goal is to keep power at whatever price,” said opposition leader Julio Borges.

Critics say 18 years of socialist policies have wrecked the economy and it is time for Maduro to go.

Plans for a referendum before the next presidential election in 2018 have so far come to nothing.