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Inflation-hit Venezuela pulls biggest bank note

Tuesday, December 13, 2016 - 01:49

Venezuela, mired in an economic crisis and facing the world's highest inflation, will pull its largest bill, worth two U.S. cents on the black market, from circulation this week. David Pollard reports.

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He has the beard, the hat, and the tummy. One thing Santa can't manage many of this year is presents. Though there is the odd bag of food to give out. Basic goods are scarce in Venezuela But these, its most common bank notes - are to disappear altogether. (SOUNDBITE) (Spanish) VENEZUELAN PRESIDENT, NICOLAS MADURO, SAYING: "We'll take out of circulation the 100-bolivar bills over the next 72 hours, and give a fair deadline for those who own the bills to declare them ..." The surprise move will, he says, deal a blow to so-called 'mafias'. Crime networks claimed to be hoovering up bank notes to buy subsidised goods for sale at vast profit in Colombia. Local Venezuelans say they'll take the loss. Instead of taking money out for Christmas, many of them trying to put it back in through local cash machines. Desperate to get notes credited to their accounts before a ten-day deadline expires. (SOUNDBITE) (English) FIDELITY WORLDWIDE INVESTMENT, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "Two years of rock bottom oil prices have hit the Venezuelan economy extremely hard. It's very dependent on oil revenues and they've been a lot lower than they would have anticipated. I think the general competence of managing the economy is the other factor. Big problems." They may only be worth two US cents each, but there are six billion or more 100-bolivar bills in circulation - nearly half of all cash. As they get withdrawn, six new bills get introduced - the largest worth around five dollars. The government answer to big problems: bigger notes. Though against inflation that could hit 500 per cent this year, few see even that as anywhere near big enough.

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Inflation-hit Venezuela pulls biggest bank note

Tuesday, December 13, 2016 - 01:49