Venezuela cash crisis sparks fury
Notes taken out of circulation before replacements ready
CARACAS // Venezuelans looted lorries and clashed with police as a plan to introduce new banknotes left people without cash – the latest problem in a spiralling economic crisis. President Nicolas Maduro blamed opposition politicians for the unrest, claiming there were pictures and videos of some opposition members of the National Assembly involved in “attempts of vandalism and some acts of violence”.
He warned that “parliamentary immunity does not reach that far”, but did not give any names. Mr Maduro also accused unnamed opposition leaders of being among rioters who burnt two state banks in the town of Guasdalito, near the border with Colombia, and said they would be “captured and put behind bars”.
Faced with inflation worldwide that has made the Venezuelan currency worthless, the government is trying to introduce bills in denominations up to 200 times higher than the old ones. But the plan went off the rails when Mr Maduro ordered the 100-bolivar note removed from circulation before the new bills arrived.
Formerly, the highest denomination bill, the 100-bolivar note, was worth about three US cents (11 fils) and accounted for 77 per cent of the cash in circulation in Venezuela. It ceased to be legal tender on Thursday.
Venezuelans were to have 10 days to exchange the notes at the central bank, but Mr Maduro cut the grace period to five days.
Protests erupted as people were left without money to buy food or Christmas presents.
In the second city of Maracaibo, protesters hurled stones at police. In the eastern city of Maturin, dozens of people blocked a major avenue and looting broke out.
“I went by the market and it was being guarded by the military,” said Juan Carlos Leal, a farmer in Maturin.
In Puerto La Cruz, another eastern city, “people rioted because they wanted to take out money and weren’t allowed to,” said Genesis, a baker.
“Police fired in the air to calm the riot. Everyone dispersed and police ordered shops to close,” said Genesis, who asked not to be identified by her surname.
In the city of Santa Barbara four people were reportedly in- jured when drivers of a security vehicle transporting money opened fire on people trying to break into it.
In the capital, Caracas, thousands of Venezuelans queued to rid themselves of 100-bolivar notes at the only place still accepting them: the central bank.
Many were angry to learn they would only be allowed to deposit the old bills or obtain “special vouchers” for new ones.
“The world has turned upside down,” said Jesus Garcia, 21.
“Normally, there’s no food. Now there are no bills to buy it.” Mr Maduro, who took office in 2013, has presided over an unravelling of Venezuela’s oilrich economy as crude oil prices plunged.
The import-dependent country is short of food, medicine and basic household goods.
Venezuela’s inflation rate will hit 475 per cent this year, the International Money Fund forecast.
Mr Maduro said the 100-bolivar note had to be scrapped because “mafias” were hoarding it abroad in what he called a United States-backed plot to destabilise Venezuela.
In response, he sealed the borders with Colombia and Brazil until today, exacerbating the chaos. Angry crowds massed in San Antonio at a bridge crossing on the Colombian border, yelling “We want to cross. We are suffering. We are hungry, we have no medicine, we have nothing.”
The banknotes were supposed to be launched yesterday but the bills, which are being printed abroad, have yet to arrive.
Venezuelans were accustomed to carrying around huge stacks of 100-bolivar bills for even the smallest purchases.
Now, they are stuck trying to amass even bigger piles of 10, 20 and 50 bolivar notes. Some companies stopped dealing in cash altogether.
“By removing the 100-bolivar bills, they are jamming up the economy,” said economist Alberto Martinez.
“Cash registers have no money. The system is under stress.”