- Title: New 500-bolivar notes in circulation amidst record Venezuelan inflation
- Date: 17th January 2017
- Summary: CARACAS, VENEZUELA (JANUARY 17, 2017) (REUTERS) VARIOUS OF PEDESTRIANS MAN SELLING NEWSPAPERS ON STREET FRONT PAGE OF NEWSPAPER EXTERIOR OF BANK PEOPLE WAITING IN LINE OUTSIDE BANK FOR NEW NOTES VARIOUS OF MAN GETTING NEW NOTES FROM A TELLER VARIOUS OF TELLER COUNTING NEW NOTES (SOUNDBITE) (Spanish) LOCAL, GUSTAVO CASTILLO, SAYING: "I think it is more of the same. Effectively what we are doing is putting more money on the street, attracting more inflation. The economic situation that is getting worse will not change. More notes on the street means more inflation, depreciation in the currency and nothing else." MORE OF MACHINE COUNTING NOTES NOTES BEING MANUALLY COUNTED WOMAN GETTING NEW NOTES FROM BANK VARIOUS OF NEW NOTES (SOUNDBITE) (Spanish) LOCAL, PEDRO APONTE, SAYING: "For transactions it is much faster, less paperwork with less money and costs on top of it. I hope it works well and that you can withdraw normal notes and that it all flows well like before." WOMAN WITH NEW NOTES NEW 500 NOTE AMONGST OLD 100 NOTES MOTORCYCLE TAXI DRIVER WITH NEW NOTE MORE OF NEW NOTE MORE OF PEDESTRIANS LOCAL MERCHANT, OLGA GONZALEZ, WORKING (SOUNDBITE) (Spanish) LOCAL MERCHANT, OLGA GONZALEZ, SAYING: "We haven't gotten any yet. The only thing that will be a little difficult is giving all the change back. So we prefer point of sales machines (which except card transactions) to make it easier for merchants." VARIOUS OF EXTERIOR OF BANK OF VENEZUELA WOMAN SHOWING NEW NOTES WOMAN COUNTING NEW NOTES MORE OF PEDESTRIANS
- Embargoed: 31st January 2017 00:40
- Keywords: Venezuela currency bills bolivars notes
- Location: CARACAS, VENEZUELA
- City: CARACAS, VENEZUELA
- Country: Venezuela
- Topics: Currencies/Foreign Exchange Markets,Economic Events
- Reuters ID: LVA0015ZBZS5F
- Aspect Ratio: 16:9
- Story Text:New 500-bolivar notes have hit the streets of inflation-ravaged Venezuela after the government announced the withdrawal of its largest-circulating 100-bolivar note.
Facing the world's highest inflation, Venezuela pulled its largest bill, worth two U.S. cents on the black market, from circulation, prompting a cash crunch in the OPEC nation.
No official inflation data is available for 2016 though many economists see it in triple digits. Economic consultancy Ecoanalitica estimates annual inflation this year at more than 500 percent.
Local Gustavo Castillo believes the new note will only exacerbate inflation in the OPEC nation.
"I think it is more of the same. Effectively what we are doing is putting more money on the street, attracting more inflation. The economic situation that is getting worse will not change. More notes on the street means more inflation, depreciation in the currency and nothing else," he said.
The oil-producing nation's bolivar currency has fallen 55 percent against the U.S. dollar on the black market in the last month.
According to DolarToday, the 500-bolivar note is worth about 14 U.S. cents.
Local Pedro Aponte told Reuters that the new larger note will make transactions easier.
"For transactions it is much faster, less paperwork with less money and costs on top of it. I hope it works well and that you can withdraw normal notes and that it all flows well like before," he said.
Strict currency controls introduced in 2003 that pegged the bolivar to the dollar, coupled with heavy reliance on oil, are seen as the root of the crisis by most economists. Maduro has blamed an "economic war" being waged against his government by the opposition and the United States.
Local merchant Olga Gonzalez prefers card payments over hard currency.
"We haven't gotten any yet. The only thing that will be a little difficult is giving all the change back. So we prefer point of sales machines (which except card transactions) to make it easier for merchants," she said.
The new 500 and 20,000 bolivar notes were announced last year and followed a snap decision to withdraw the 100 bolivar note. A shortage in the new notes and a rush to banks to swap over outgoing currency had sparked anger and tensions in the OPEC nation.
Maduro has blamed a campaign of sabotage by adversaries for problems in the roll out of the new notes. - Copyright Holder: REUTERS
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