Venezuela to issue bigger bank note as inflation soars

Global Business

Venezuela Economic Crisis The front and back of the newly issued 20,000 Bolivar is displayed during a news conference in Caracas, Venezuela, Wednesday, Dec. 7, 2016. Venezuelan Central Bank President Nelson Merentes unveiled the new series of higher-denominated bills as triple-digit inflation and a currency meltdown leave the country’s largest note worth just around 2 U.S. cents on the black market. (AP Photo/Fernando Llano)

Venezuela plans to start issuing new higher denomination bank notes this week – with the highest new note worth 200 times the previous highest note. The Venezuelan government is pulling that note out of circulation.

Juan Carlos Lamas reports from Caracas.
Follow Juan Carlos Rivas Lamas on Twitter @JuanRivasLamas

Venezuela to issue bigger note as inflation soars

Venezuela plans to start issuing new higher denomination bank notes this week – with the highest new note worth 200 times the previous highest note. The Venezuelan government is pulling that note out of circulation. CCTV America's Juan Carlos Rivas Lamas reports

Standing in line is nothing new to Venezuelans. But this week in addition to the usual lines to buy food and medicine, people are waiting outside the bank, to deposit banknotes being pulled out of circulation.

Hyperinflation has turned Venezuela’s currency into worthless pieces of paper with the highest notes, 100 bolivars, worth about two cents at the unofficial exchange rate.

The 100 bolivar bank note will be out of circulation by Wednesday. After December 15th, citizens have 10 days to exchange the banknotes at the Central Bank of Venezuela.

The central bank plans to gradually release new higher value notes to allow Venezuelans can go back to carrying their bills in wallets instead of bags.

But turning in the old notes has not gone smoothly, and many Venezuelans say they’re tired of waiting for a solution.

“We lost the entire day queuing, it’s upsetting and degrading but there’s nothing we can do,” said Carlos Contreras, a Venezuelan citizen.

The plan is for the new bills to help ease transnational problems, which include the frequent collapse of electronic payment systems. But critics say the new bills won’t put a stop to runaway inflation, nor will they stock shelves with food or medicine.

In November alone, the bolivar lost more than half its value.

According to the IMF, inflation in Venezuela is expected to rise to a whopping 1660 percent in 2017. Venezuelans meanwhile are hoping the new banknotes can keep pace.