Venezuela: 100-bolivar Banknote Withdrawal Postponed

Venezuela’s President Nicolas Maduro has announced the withdrawal of the 100-bolivar banknote will be delayed until January 2, 2017.

The sudden change of policy comes after days of economic chaos.

In a TV address, President Maduro claimed Venezuela had been the victim of international sabotage, which had prevented new 500-bolivar currency notes arriving in time.

Many Venezuelans have spent several days in long queues trying to hand in or swap the old notes.

Thousands of stores have closed because of a cash shortage, and the public have been forced to rely on credit cards or bank transfers. Many were left unable to buy food.

Anger over the move led to skirmishes in six cities on December 16, the Associated Press reported. It said 32 people were taken into custody and one person was injured.

In the capital, Caracas, people waved their 100-bolivar bills in the air and chanted “they’re useless!” – then turned and ran as police in riot gear fired tear gas.

Nicolas Maduro’s government had said the scrapping of the 100-bolivar note was necessary to prevent smuggling.

The president said the aim was to tackle gangs which hoard Venezuelan currency abroad, a move he has previously described as part of the “economic war” being waged against his government.

Nicolas Maduro has said the gangs hold more than 300 billion bolivares worth of currency, most of it in 100-bolivar notes.

He said there were “entire warehouses full of 100-bolivar notes in [the Colombian cities of] Cucuta, Cartagena, Maicao and Buaramanga”.

Nicolas Maduro said one reason for withdrawing the banknotes was to block any of the 100-bolivar notes from being taken back into Venezuela so the gangs would be unable to exchange their hoarded bills, making them worthless.

Venezuela’s central bank data suggests there are more than six billion 100-bolivar notes in circulation, making up almost half of the country’s currency.

Economic experts fear scrapping the 100-bolivar note will have little positive effect on Venezuela’s chronic economic and political problems.