Dec 2016 Financial News

Venezuela to print 20,000-unit banknote

Dec 07, 2016

CARACAS, Venezuela (AFP) — Inflation-stricken Venezuela will launch a new 20,000-bolivar banknote to help shoppers struggling with huge wads of currency in the country’s economic crisis, the central bank said.

The biggest denomination banknote currently in circulation is 100 bolivars — worth fewer than three US cents at current market rates.

The Venezuelan central bank said in a statement on Sunday it will start to release a series of new notes from December 15, to “make the payment system more efficient and commercial transactions easier”.

The new notes range from 500 to 20,000 Bolivars — the latter amount being equivalent to about US$5.00.

Certain smaller denominations will be changed from notes to coins, it said.

Falling world prices for Venezuela’s crucial oil exports have caused a shortage of US dollars in the country.

That has driven up the price of imports of food, medicine and other crucial goods.

The government fixes a special low exchange rate for purchases of essential goods.

But shortages oblige Venezuelans to shop on the black market at higher prices.

The last official inflation estimate given by Venezuelan authorities was 180 per cent in 2015.

The International Monetary Fund has forecast the rate will hit 475 per cent by the end of this year.

A particularly sharp surge in inflation over recent weeks sparked a shortage of notes, causing long queues at banks and cash machines.

The centre-right opposition blames socialist President Nicolas Maduro’s management for the crisis.

A tense political standoff has developed as the opposition pushes to remove him from office.

Maduro says the crisis is a US-backed capitalist conspiracy.

Source:
Jamaica Observer
Wednesday December 7, 2016

http://www.jamaicaobserver.com/business/Venezuela-to-print-20-000-unit-banknote_82703