Venezuela to swap highest denomination banknotes for coins

Venezuela to swap highest denomination banknotes for coins

(BBC)  The Venezuelan government has announced it will replace the country’s highest-denomination banknotes with coins within 72 hours.

It hopes swapping the 100-bolivar notes will help to stop smuggling and tackle shortages of food and other items.

President Nicolas Maduro says gangs operating in border areas will not have time to repatriate the notes.

His critics dismissed the move as the latest desperate attempt by Mr Maduro to tackle the economic crisis.

“When ineptitude governs! Who would possibly think of doing something like this in December amid all our problems?” opposition leader Henrique Capriles wrote on Twitter (in Spanish).

Others argued it would be impossible to swap all the 100-bolivar notes in circulation in the time allotted.

The 100-bolivar note has lost most of its value over the past few years and is now worth about 2 US cents (£0.015).

Venezuela, which is facing a serious economic and political crisis, has one of the world’s highest inflation rates.

“I have given the orders to close all land, maritime and air possibilities so those bills taken out can’t be returned and they’re stuck with their fraud abroad,” said Mr Maduro on television.

People cross the Simon Bolivar bridge in Norte de Santander department, Colombia, on the border with Venezuela, on December 11, 2016Image copyrightAFP

Image captionMr Maduro said gangs on the Colombia-Venezuela border would not be able to repatriate the money

Earlier this month, the central bank said that six new bills ranging from 500 to 20,000 bolivars would come into circulation on 15 December.

The government last published figures for inflation in December 2015, putting it at 180%, but the International Monetary Fund (IMF) estimates that next year’s prices will rise by more than 2,000%.

In India, a similar move to scrap high-value bank notes last month has caused major disruption.

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