Cash crunch

Many feeling the pinch as bolivar shortfalls add to nation’s economic crisis

Venezuelans are struggling with cash shortages, with people forming long lines outside banks several times a week to withdraw what little money is available while others are resorting to bartering goods and services to skirt cash transactions.

CARACAS: Venezuelans already struggling to find food, medicine and other basic necessities have a new shortage to worry about: cash.

Troubling shortfalls of Venezuelan bolivars are forcing many in this distressed South American nation to form long lines outside banks several times a week to withdraw what little cash is available.

Others are resorting to bartering goods and services to skirt cash transactions.

“As if we didn’t have enough problems already,” said watchmak er Roberto Granadillo, 37. “Now we can’t even find bills.”

Venezuelan President Nicolas Maduro blames the cash crunch on mafias moving bills overseas in an attempt to derail the nation’s economy, though he has presented only scant evidence to back the claim.

What is certain is that the country’s tripledigit inflation continues to skyrocket, meaning Venezuelans must find larger quantities of the scarce bills to purchase even relatively inexpensive items such as bread or a cup of coffee – or turn to electronic transfers from their bank accounts.

The Venezuelan government released new, higher denomination bills in values of 500, 5,000 and 20,000 bolivars earlier this year after the currency meltdown left the country’s then largest note worth around two US cents (eight sen) on the black market.

But now even the freshly minted bills, printed in rainbow hues and imported in part from the United States, are dwindling in value.

In January, one US dollar was worth 4,578 bolivars (RM1,937) on Venezuela’s pervasive black market; by October a US dollar got you 29,170 bolivars (RM12,342), according to DolarToday, a website critical of the government that tracks the black market rate.

Analysts project that Venezuela’s inflation could surpass 1,000% this year, and many Venezuelans worry that recently announced sanctions by the Trump administration prohibiting US banks from issuing new credit to the Venezuelan government or its state oil company will deepen the economic crisis.

Last month, Venezuelan authorities enacted stricter banking and business regulations in an attempt to stem the tide of bolivar bills. Officials are also considering printing bills in even higher values.

The cash shortage is already being felt in the daily lives of Venezuelans like Granadillo, who said his weekly income has slipped more than 50% as customers use the bills they are able to obtain to buy food instead of comparative luxuries like a watch repair. — AP

Hard times: People queuing outside a bank in Caracas in the hope of withdrawing money. — AP

The little that’s left: A vendor holding bank notes in a plastic bag at a market in Caracas. — AP

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