Cash shortage adds to weary residents’ woes
CARACAS, Venezuela — Citizens 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 Roberto Granadillo, 37, a watchmaker. “Now we can’t even find bills.”
President Nicolas Maduro blames the cash crunch on mafias moving bills overseas in an attempt to derail the nation’s economy, though he’s 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 like 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 2 U.S. cents on the black market.
But now even the freshly minted bills, printed in rainbow hues and imported in part from the United States, are quickly dwindling in value. In January, one U.S. dollar was worth 4,578 bolivars on Venezuela’s pervasive black market; by October a U.S. dollar got you 29,170 bolivars, according to DolarToday, a website critical of the government that tracks the black market rate.
Analysts project Venezuela’s inflation could surpass 1,000 percent this year and many residents worry recently announced sanctions by the Trump administration prohibiting U.S. banks from issuing new credit to the Venezuelan government or its state oil company will deepen the economic crisis. In September, 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 already os being felt in the daily lives of Venezuelans like Granadillo, who said his weekly income has slipped more than 50 percent as customers use the bills they are able to obtain to purchase food instead of comparative luxuries like a watch repair.
Instead of cash, he has recently begun accepting a new form a payment: ham, chicken or beef in exchange for a newly ticking watch. “You have to find a way to eat,” Granadillo said.
The escalating cash crunch comes on the heels of four months of political upheaval that left at least 120 people dead in near-daily protests decrying Maduro’s rule. In early August, a new, all-powerful constitutional assembly was installed following a vote boycotted by the opposition. One of the new assembly’s first acts was to declare itself superior to all other branches of government, making the nation’s already weakened legislature an essentially powerless institution.