The Venezuelan government has announced it will swap the highest denomination 100-bolivar notes to coins amid an inflation crisis. The swapping, which will happen within 72 hours, is the country's hope to tackle food shortages and other items, as well as to end smuggling.
According to hours-long speech of President Nicolas Maduro, the 100-bolivar bill will stop circulating on Wednesday. After that, Venezuelans will have 10 days to exchange those bills at the central bank. Critics said that Mr. Maduro's move to combat bills contraband at the Colombia-Venezuela border was nonsensical since swapping all 100-bolivar bills in circulation is impossible in the short time the president has allotted, Irish Times reported.
In November, central bank data showed that there were more than six billion 100-bolivar notes in circulation, 48 percent of all coins and bills. On Thursday, authorities are due to start releasing three new coins and six new notes, which will range from 500 to 20,000 worth of bolivars. The central bank said the six new notes would come into circulation on December 15.
According to BBC, Venezuela is not only facing a serious political and economic crisis, it also has high inflation rates. President Marudo told the media that he has given the orders to close all land, air and maritime possibilities so those notes taken out cannot be returned. Mr. Marudo has said in the past that organized crime networks at the border of Colombia-Venezuela buy up Venezuelan bills to in turn buy subsidized Venezuelan products and sell them for big profits in Colombia.
The government of Venezuela last published figures for inflation in December last year, putting it at 180 percent, but the International Monetary Fund estimates that the prices next year will rise by more than 2,000%. In India, a similar move to replace high-value bills last month led to major disruption.
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