Venezuelans Prepare for Largest Currency Note to Be Yanked

Venezuela has closed its border with Colombia for three days to try to stop smuggling gangs who are accused of causing economic turmoil.

President Nicolas Maduro on Monday ordered the closure of Venezuela’s border with Colombia for 72 hours in a crackdown on what he says are “mafias” smuggling hard-to-find cash that is destabilizing the socialist economy.

“There are entire stores of 100-bolivar notes in Cucuta, Cartagena, Maicao, Bucaramanga”, Mr Maduro said.

Further complicating matters, the country’s credit card systems often crash, meaning Venezuelans can’t rely on exclusively plastic. On Tuesday, banks quickly ran out of lower denomination bills.

‘This seems insane, like the government did this on a whim.

“This is madness”, Leopoldo Lopez, a 54-year-old insurance salesman, said as he waited in line to deposit a thick wad of banknotes at an automated bank machine in eastern Caracas. The exchange on the street climbed in recent weeks to 4,500 bolivars. Maduro has blamed an “economic war” being waged against his government by the opposition and the US. “This wasn’t thought out”.

The government responded last week by announcing six new notes ranging from 500 bolivars to 20,000 bolivars.

Monday was a bank holiday, so starting Tuesday morning people lined up before banks opened waiting to deposit their 100-bolivar notes in their accounts. This led to a crisis in the medical sector and hunger among millions of people.

Many others are increasingly traveling to Colombia to find supplies. The only surprise was the sudden withdrawal of 100 denomination bills.

The move will help fight against contraband of the bills at the border, according to Maduro, while critics say it will exacerbate the government’s cash crisis.

The healthcare system is also unraveling as a effect of the collapsing economy. He showed photos of stacks of bolivar bills but presented no further evidence.

According to the new rule banknotes and coins will be issued with values nearly 200 times the 100 bolivar note. They would be stuck with worthless paper, he said.

The move to introduce new bills will reduce the amount of cash needed to buy something but the decision to remove the 100 Bolivar bill is now being compared to a similar decision announced in India recently.

But some Venezuelans – about one in five of whom still support Maduro – saw a ploy by the opposition to fan fear. “I’m trying to spend bolivars, not save them”.