- Title: Venezuela rolls out bigger bills amid world's highest inflation
- Date: 7th December 2016
- Summary: CARACAS, VENEZUELA (DECEMBER 7, 2016) (REUTERS) VARIOUS OF EXTERIOR OF VENEZUELA'S CENTRAL BANK VARIOUS OF VENEZUELAN CENTRAL BANK PRESIDENT NELSON MERENTES ARRIVING AT NEWS CONFERENCE VARIOUS OF MERENTES WITH CENTRAL BANK DIRECTORS AT NEWS CONFERENCE (SOUNDBITE) (Spanish) NELSON MERENTES, VENEZUELAN CENTRAL BANK PRESIDENT, SAYING: "We have six new bills from 500 to 20,000 (bolivars). The importance of this is that they will facilitate commercial transactions needing cash. A bill for 500 substitutes 5 100-bills, the 10,000 one substitutes x-number of bills for 100, and so on." NEW 500 BOLIVAR BILL AUDIENCE DURING NEWS CONFERENCE VARIOUS OF NEW 5,000 BOLIVAR BILL MERENTES DURING NEWS CONFERENCE VARIOUS OF NEW 20,000 BOLIVAR BILL (SOUNDBITE) (Spanish) NELSON MERENTES, VENEZUELAN CENTRAL BANK PRESIDENT, SAYING: "We are looking for alliances with the country's science departments regarding production, so the ink can be made in the country and not brought in from a foreign country. We are in the process of this so that the chemicals that will be used for production and-- looking a bit further in the future-- so that the paper and security of the bills can also be produced in Venezuela so we can go from being a country that imports raw material to being a country that exports technology in the case of bills that are used throughout Latin America, the Caribbean, Caricom and South America." MERENTES WITH BANK DIRECTORS DURING NEWS CONFERENCE
- Embargoed: 22nd December 2016 19:00
- Keywords: bills denominations inflation bolivars
- Location: CARACAS, VENEZUELA
- City: CARACAS, VENEZUELA
- Country: Venezuela
- Reuters ID: LVA0015BVYAF7
- Aspect Ratio: 16:9
- Story Text: Venezuela unveiled six new notes of higher denominations to help alleviate practical problems in doing business with the world's most inflationary currency.
Prior to the rollout, the OPEC nation's largest note is worth just 2 U.S. cents on the black market, meaning cash transactions are extremely cumbersome.
The largest new bill will be worth 20,000 bolivars, just under $5 on the streets. It will be accompanied by notes of 10,000, 5,000, 2,000, 1,000 and 500 bolivars and three coins of smaller value.
"We have six new bills from 500 to 20,000 (bolivars). The importance of this is that they will facilitate commercial transactions needing cash. A bill for 500 substitutes 5 100-bills, the 10,000 one substitutes x-number of bills for 100, and so on," explained Venezuelan Central Bank President Nelson Merentes.
Paying a restaurant or supermarket bill without a debit or credit card can often require a backpack full of cash.
According to the central bank, the 500 and 5,000 bills will be put into circulation on December 15, with the other bills and coins rolled out successively. No current bills will be taken out of circulation.
Merentes said they are hoping all raw materials and production will occur within Venezuela, where severe shortages have hampered productivity.
"We are looking for alliances with the country's science departments regarding production, so the ink can be made in the country and not brought in from a foreign country. We are in the process of this so that the chemicals that will be used for production and-- looking a bit further in the future-- so that the paper and security of the bills can also be produced in Venezuela so we can go from being a country that imports raw material to being a country that exports technology in the case of bills that are used throughout Latin America, the Caribbean, Caricom and South America," he added.
The bolivar currency has suffered its most dramatic monthly fall in history, down 60 percent since early November against the dollar on the black market, as the country struggles with a major economic crisis that is leaving millions hungry and the medical sector in crisis.
President Nicolas Maduro blames the country's economic crisis to an "economic war" led by the opposition with a helping hand from Washington.
Strict currency controls introduced in 2003, which pegged the bolivar to the dollar, coupled with heavy reliance on oil are seen as the root of the crisis by most economists.
Venezuela's central bank has failed to publish any inflation data for 2016. The International Monetary Fund estimates that price rises next year will surpass 2,000 percent.
The money supply, the sum of cash and checking deposits as well as savings and other "near money" deposits, was up a staggering 12 percent in the two weeks to November 25 and the curve is literally exponential since Maduro's predecessor Hugo Chavez came to power in 1999. - Copyright Holder: REUTERS
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