Demonetisation: After India, it's Venezuela's turn for note ban to fight black money
Weeks after India tried its hands at the demonetisation exercise, Venezuela banned use of 100-bolivar bills, the highest denomination in the local currency, which will lose their value and be removed from circulation on Thursday by order of President Nicolas Maduro.
Caracas: Weeks after India tried its hands at the demonetisation exercise, Venezuela banned use of 100-bolivar bills, the highest denomination in the local currency, which will lose their value and be removed from circulation on Thursday by order of President Nicolas Maduro. Thousands of Venezuelans on Tuesday rushed to public and private banks around the country to turn in their currency.
Venezuelan President Nicolas Maduro on Sunday signed an emergency decree ordering the country`s largest banknote, the 100 bolivar bill, taken out of circulation to thwart "mafias" he accused of hoarding cash in Colombia.
The announcement came as the government of Venezuela -- a country in the midst of an economic crisis and crippled with the world`s highest inflation -- prepares to issue new banknotes and coins in values up to 200 times the highest denomination currently available.
The 100 bolivar bill is worth fewer than three cents of a dollar at current market rates. One bill can barely cover the cost of a piece of candy, while a stack of 50 notes is needed to buy a hamburger.
According to what EFE was able to confirm, lines of up to 150 people were forming at banks located in the eastern part of the Venezuelan capital and most of those citizens were elderly and waiting their turn to turn in their currency.
On Sunday, President Nicolas Maduro ordered the most common bank note, the 100-bolivar unit, to be scrapped by Thursday.
Just one private financial institution among those checked by EFE said that it was exchanging cash, that is to say, accepting up to 50,000 bolivares (about $75) in 100-bolivar bills and returning the same sum to customers in 2, 5 and 10-bolivar bills. The rest of the banks were accepting the bills as deposits to people's accounts.
About a dozen customers told EFE that they had decided to make a trip to their banks exclusively to deposit those bills during the first of the three days the government has designated for Venezuelans to get rid of them.
With Agency Inputs