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100 bolivares

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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.venezuela-pulls-100-bolivares-notes

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.

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Venezuela has decided to close its border with Colombia for 72 hours in the latest measure to combat smuggling gangs.

According to President Nicolas Maduro, the “mafia” operating in border areas is causing huge damage to the economy.

Many items subsidized by Venezuela’s socialist government, including diesel and petrol, are sold at a huge profit over the border in Colombia.

On December 11, Nicolas Maduro announced that Venezuela’s highest denomination bank note, 100-bolivar, would be taken out of circulation.

He said the move would stop gangs hoarding the currency.

“Let’s destroy the mafia before the mafias destroy our country and our economy,” Nicolas Maduro said on national TV.venezuela-pulls-100-bolivares-notes

“This measure was inevitable, it was necessary,” he added.

“The mafias will go bust.”

Venezuela last closed most border crossings with Colombia in August 2015 and it was partially reopened a year later.

In 2015, Colombia complained that it had not been consulted or informed.

However, both sides eventually reached an agreement to cooperate on tackling crime and smuggling along the 1,370 miles border.

The measure caused huge disruption for the people who live and work in border cities.

This time, Nicolas Maduro said the border would be reopened after 72 hours, once the 100-bolivar notes ceased to be valid.

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

Venezuelans will then have 10 days to exchange the notes for coins and new, higher-value bills, but only at the Central Bank.

President Nicolas Maduro said the gangs held 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”.

On December 11, he said: “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.”

Nicolas Maduro’s critics have predicted chaos and doubt that the facilities will be in place for people to exchange all their 100-bolivar notes.

Opposition leader Henrique Capriles tweeted: “When ineptitude governs! Who would possibly think of doing something like this in December amid all our problems?”

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Venezuela will replace its 100-bolivar banknotes with coins within 72 hours.

The government hopes swapping the country’s highest denomination notes will help to stop smuggling and tackle shortages of food and other items.

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

Nicolas Maduro’s critics dismissed the move as the latest desperate attempt by the president to tackle the economic crisis.venezuela-pulls-100-bolivares-notes

Opposition leader Henrique Capriles tweeted: “When ineptitude governs! Who would possibly think of doing something like this in December amid all our problems?”

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.

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

President Nicolas Maduro said on TV: “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.”

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

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

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