Following the Indian decision to demonetize its two largest denominations in November, the President Nicolàs Maduro of Venezuela announced on 12 December the immediate withdrawal of the largest banknoteA banknote (or ‘bill’ as it is often referred to in the US) is a type of negotiable promissory note, issued by a bank or other licensed authority, payable to the bearer on demand. More the 100 bolivar. The withdrawal was initially to take place within 72 hours, but the lack of new notes triggered widespread protests and looting; the use of the banknote was then extended until after the new year.
President Maduro said the aim of withdrawing the note was to combat international “mafias” that hoard Venezuelan currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More to hurt his government in an “economic war”.
The value of the bolivar had spiralled following triple-digit inflation; according to the Financial Times, the 100 bolivar note is worth 4 US cents on the parallel market. The central bank had ordered new denominations, including 20,000 bolivar notes from international printers. But their arrival has been delayed leading to a severe cashMoney in physical form such as banknotes and coins. More crisis.