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Venezuelans in mining town loot stores that refuse to accept cash

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By Reuters

CIUDADGUAYANA, Venezuela (Reuters) – At least 10 stores in a southern Venezuelan mining town were looted on Monday after they refused to accept low-denomination banknotes, locals said, a sign of how hyperinflation is roiling commerce in the South American country.

The stores in Guasipati had all turned down bills worth 50,000 bolivars, worth less than 2 U.S. cents. Merchants prefer receiving larger bills – the central bank in March said it was issuing a 1 million bolivar note – to avoid handling large handfuls of cash.

“The 50,000 bolivar bill has become a hindrance,” said David Bermudez, vice president of the Consecomercio group representing retailers.

Bermudez said that there was not yet an estimate as to the value of the damage, but that looters had stolen food and equipment after breaking through stores’ walls.

There was no immediate comment from local authorities, and Venezuela’s information ministry did not immediately respond to a request for comment.

Although hyperinflation has led to an informal dollarization of Venezuela’s economy, bolivar notes are still needed to pay for public transit and some other services. Until the central bank introduced new bills in March, the 50,000-bolivar note was the largest in circulation.

The incidents resembled a wave of looting that took place in 2016 after the government took small-denomination bills out of circulation. The country is mired in a years-long economic crisis that has prompted millions of Venezuelans to emigrate.

(Reporting by Maria Ramirez; Writing by Luc Cohen. Editing by Gerry Doyle)