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  HOME | Venezuela (Click here for more Venezuela news)

Venezuela's Maduro Flip-Flops Again, Extends Deadline for Withdrawal of Largest Bill

By Carlos Camacho

CARACAS -- Embattled Venezuelan President Nicolas Maduro extended for the second time Thursday the deadline to withdraw the Bs 100 banknote, a move that has already caused deaths and riots in the oil-rich, high-crime country.

The President appeared overjoyed when giving the news of the extension in a televised speech. “Keep on enjoying your Christmas at ease,” a smiling, beaming Maduro said. He didn’t even change his expression when he gave the bad news: “there is an important delay” in the eventual arrival of the new bills and coins that are to replace the Bs 100 bill.

“And everybody, just be quiet”, Maduro said, non-sequitur, at least twice during the allocution.

Maduro then announced that the bill he said would be null and void in 3 days back on December 11, causing panic, riots and looting, would now be extended in use until January 20.

Some Bs 500, Bs 20,000 and Bs 5,000 bills have arrived in country already, but not enough to replace the more than 6 billion pieces of the Bs 100 banknote, a fact Maduro again ascribed to “sabotage” from unspecified parties.

The President’s odd speech and decision are only the latest act in a tragedy of errors that began December 7th.

KILL THE 100 BILL

After months of denying it, on December 7th the Central Bank of Venezuela admitted they were ready to replace the current bills and coins. Hyperinflation had made them useless, even the largest, the Bs 100 banknote. Useless at 4 cents, even taking into consideration they were launched less than eight years ago after Chavez wiped out 3 zeros (it was the 100,000 bolivars then).

So, the good news: New bills, with the new, biggest one with a face value of Bs 20,000, a full 200 times larger than the old big guy. A testament to inflation, which in 2015 totaled 181%, a world record. And worth less than US$7.

The new bills, the bank said, are to start circulating December 15th. However, before that day, something serious happened.

BILL RIOTS

On December 11th, four days before the new bills were to hit the streets, President Maduro made a surprise announcement: the old Bs 100 bill was going to be null and void in only 72 hours. That bill represented 48% of all bills and coins in circulation and more than 70% of the country’s liquidity. The measure, analysts said, was going to be impossible to implement.

Venezuelans rushed the banks to deposit the soon-to-be-worthless bills and businesses, including government-owned ones, stopped taking the bill, knowing that it was going to worthless, even as ATM’s kept spitting 100’s out.

The inevitable happened: On December 13th, two men died in a shootout, as one was trying to deposit a suitcase of about $75 in old bills and the other tried to rob him of the paltry (for US standards) loot. That event in Central Venezuela’s Carabobo state was the first salvo for several days of rioting and looting all over Venezuela, which went underreported thanks to a media blackout, leaving Venezuela with only social media to keep it more or less informed.


December 17th Maduro realized his idiocy and recanted, saying the Bs 100 bill was going to live until January 2nd. But to no avail: riots, looting and killings continued and, in some locations, worsened. Three people died Sunday December 18th in Ciudad Bolivar in events directly related to the cash crunch and ensuing disorder.

EXCUSES

Maduro has explained the delay in the arrival of the new bills in many, conflicting ways. Planes carrying the new currency were sabotaged, he said. Obama was conspiring against Venezuela, he later said.

However, to this day, no new bills have arrived in Venezuela. Thursday, there were rumors of the Bs 50 coin having been sighted in some pro-Maduro areas of Caracas. But still, no match for the bill that symbolized Hugo Chavez’s dream of a “Bolivar Fuerte”, a strong Bolivar, backed by record oil prices that would, ultimately, unseat the almighty US dollar itself.

Thursday, the Bolivar was trading at Bs 3,100 to the U.S. dollar in the parallel market.


 

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