Venezuela Puts off Demonetisation in the Face of Economic Crisis

They tried and it didn’t work.

A street vendor inspects the authenticity of a 100-bolivar note as people stand in line outside a bank to deposit their bank 100-bolivar bank notes, in Caracas, Venezuela, Tuesday, Dec. 13, 2016 (AP Photo/Fernando Llano)

Venezuelan President Nicolas Maduro has delayed the withdrawal of the 100-bolivar banknote until January 2, reports said on Sunday.

The sudden change of policy came after days of economic crisis in the South American state, the BBC reported.

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In a national broadcast, Maduro claimed his country was victim of international sabotage, which prevented new 500-bolivar currency notes arriving in time.

Also Read: After India, Venezuela Orders Demonetisation of 100-Unit Banknotes

Many Venezuelans spent several days in long queues trying to hand in or swap the old notes. Thousands of shops were closed because of the cash crunch, and the public were forced to rely on credit cards or bank transfers. Many were left without food.

Anger spilled over on to the streets and skirmishes were reported in six cities. Many were taken into custody. In Caracas, people waved their 100-bolivar bills in the air and chanted "they're useless!" - then turned and ran as police in riot gear fired tear gas.

The government said the scrapping of the 100-bolivar note was necessary to prevent smuggling.

The president said the aim was to tackle gangs which hoard Venezuelan currency abroad, a Venezuelan President Nicolas Maduro has delayed the withdrawal of the 100-bolivar banknote until January 2, reports said on Sunday.

Also Read: Pros & Cons: What Do Top Economists Think About Demonetisation?