Venezuela reinstates the 100-bolivar banknote

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By Catherine Hardy  with Reuters
Venezuela reinstates the 100-bolivar banknote

<p><br /> <br /> </p> <p>Venezuelan President Nicolas Maduro has suspended the withdrawal of the country’s most widely-used banknote.</p> <p>Maduro said the 100-bolivar bill will be reinstated after higher-denomination notes failed to arrive in time.</p> <p>The change in policy comes after days of cash shortages, clashes with police and looting.</p> <p>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.</p> <p>Officially out of use since Thursday, the 100 bolivar bill is now back in use until early January.</p> <p>“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,” <strong>Maduro</strong> said.</p> <br /> <br /> <h3>Why has Maduro done this?</h3> <br /> <br /> <p>The sudden policy u-turn follows days of chaos across Venezuela. </p> <p>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. </p> <p>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.</p> <p>Maduro had justified the 100 bolivar note’s elimination as a way of strangling the mafia and smugglers on the border with Colombia.</p> <p>He has also closed border crossing with Colombia and Brazil until January 2.</p> <p>“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.</p> <p>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.</p> <p>“One plane, contracted and paid for by Venezuela, was told in flight to change direction and go to another country,” <strong>Maduro</strong> said, without specifying who had given the orders. </p> <p>“Another was refused flyover permission.”</p> <br /> <br /> <h3><strong>Queues and looting</strong></h3> <br /> <br /> <p>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.</p> <p>Many Venezuelans had found themselves without the means to pay for food, petrol or Christmas preparations.</p> <br /> <br /> <h3><strong>Venezuela’s economic crisis</strong></h3> <br /> <br /> <p>Venezuela is already reeling from a profound economic crisis.</p> <p>Around 40% of Venezuelans do not have bank accounts and so cannot use electronic transactions as an alternative to cash.</p> <p>The country also has the world’s highest rate of inflation.</p> <br /> <br /> <h3><strong>What the opposition say</strong></h3> <br /> <br /> <p>The Democratic Unity opposition coalition say the socialist leader should resign for incompetence and for inflicting yet more suffering on Venezuelans.</p> <p>“We have a government which is utterly stupid and destructive in economic management, whose only goal is to keep power at whatever price,” said <strong>opposition leader Julio Borges</strong>.</p> <p>Critics say 18 years of socialist policies have wrecked the economy and it is time for Maduro to go.</p> <p>Plans for a referendum before the next presidential election in 2018 have so far come to nothing.</p> <br /> <br />