Panic as Venezuela takes 100-bolivar note out of circulation
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On Sunday December 11, the Venezuelan government decided to take the 100-bolivar note out of circulation in a bid to stop “international mafias” from stockpiling huge amounts of cash. Venezuelans had only 72 hours to get rid of the notes before they lost their value, generating scenes of panic outside banks.
The 100-bolivar notes were the highest-value denomination in circulation in Venezuela, corresponding to about 15 cents in US dollars, although their value varied according to the heavy inflation that affects the country (180% in 2015 and probably 475% this year, according to the International Monetary Fund).
The country’s president, Nicolás Maduro, took the notes out of circulation in an “emergency economic decree” on Sunday, saying that mafias were organising stockpiles of “300 million bolivars” from their bases in Colombia... all while the country has been in the grip of a cash shortfall for several weeks and a serious economic crisis for several years. The mafias are trying to “destabilise Venezuela’s economy and society”, according to Maduro.
Venezuelans had between Tuesday and Thursday to exchange or hand in their 100-bolivar notes at banks. The country’s border with Colombia was also closed off during those three days in order to stop the smuggling of fake notes.
"We can still take out 100-bolivar notes: it's absurd"Francisco Jimenez is a student who lives in Puerto Ordaz, in Bolivar State in the north-east of the country.
To hand in my notes, I had to queue at the bank for more than five hours. There were so many people. Some of them had their money in bags or crates. It was a bit chaotic.
But even after having handed in the notes, we can still take out that denomination from the cash machines. So I'm trying not to get any money out because I don’t want to have cash that doesn’t have a value anymore.
What’s more, it’s still possible to use even smaller denominations, which is absurd. Over the next few days, I’m going to only buy things on the internet or using a credit card.”
Since Tuesday, photos showing huge queues piling up outside of banks have been circulating on the internet. Some internet users shared photos showing old people who fainted during the long wait.
But lots of Venezuelans have also been deriding the fact that it was still possible to take out the 100-bolivar notes.
Mucha gente quedó con billetes de 100 Bs. porque hoy los cajeros automáticos, incluidos los de la banca pública los daban. ¡¡Absurdo!!— Angeles Villegas (@AngelesVillega6) 16 décembre 2016
“Lots of people still have 100-bolivar notes because the cash machines, even the ones from public banks, are still giving them out. Ridiculous!”
Police officers breaking the law?
Videos filmed in different places have also shown police officers turning up at banks with huge amounts of cash and being heckled and accused of obtaining the money through corruption.
Some of the police officers in question have been dismissed from their posts after these videos came to light – not for corruption, but for the abuse of their power. They were admonished for turning up at the bank in uniform, in official state-owned cars and not bothering to queue.
¡ATENCIÓN! En tachira el pueblo se le alzó a funcionarios del CICPC por Corruptos al intentar ingresar grandes sumas de dinero al banco.. pic.twitter.com/IvwWKJ5t1U— Jesus Medina Ezaine (@jesusmedinae) 14 décembre 2016
Video filmed on Wednesday by Jesus Medina Ezaine, in San Antonio del Táchira at the border with Colombia. The policemen in this video were fired by their national director later that day.
Pueblo se le alza a unos GNB corruptos que custodiaban a unos chinos que llevaban altas cantidades de dinero en Lara pic.twitter.com/hUXVyHdIXK— Anonymous Venezuela (@AnonsVenezuela_) 13 décembre 2016
The three officers from the Venezuelan National Guard in this video were dismissed from their posts on Thursday, accused of having helped Chinese shop-owners. The video was filmed in Barquisimeto, a city in the north-west of the country. A woman can be heard shouting, "It would be better if you actually looked after the people!"
"Not everyone was able to hand in their notes, so some people are going to lose money"Francisco Jimenez continues:
Not everyone was able to hand in their notes in 72 hours, so some are going to lose money. For example, most shop-owners on the other side of the border, in Colombia, who were selling products to Venezuelans, won't have been able to get back across the border to exchange their notes as the border was closed. [Editor's note: faced with extreme shortages of basic goods, many Venezuelans go over the border to pick up supplies].
>> READ ON THE OBSERVERS: Venezuelan women sell their hair to buy food as economic crisis worsens
Nicolás Maduro's ruling is because of another governmental decision to put new notes into circulation. These new notes will have a higher value than the current ones which are basically worthless—100 bolivars can barely buy you sweets. The aim is to make transactions simpler so that we don't have to carry a huge bunch of notes around each time we want to buy something. Having said that, though, it will only work if we manage to control inflation...
From Thursday, six new denominations of 500, 1000, 2000, 5000, 10,000 and 20,000 bolivars are meant to be introduced gradually into the country's currency. Fortunately for some Venezuelans, ten extra days have been added to the time limit for handing the old notes in to the banks.