Short on replacement currency, Venezuela extends bolivar exchange deadline

Dec. 22, 2016

Venezuela's largest denomination banknote is still going away — just not as soon as originally planned.

The initial announcement by the Socialist administration of Nicolas Maduro called for the bolivar to be withdrawn as legal tender on Dec. 14. Citizens would then have 10 days to exchange their 100 bolivar notes for new currency at a state-run bank.

One small problem: The replacement currency of 500, 2,000 and 20,000 bolivar notes didn't arrive on time from mints overseas, leaving ordinary Venezuelans — 40 percent of whom do not have bank accounts — without the means to pay for food and other daily needs.

Panic, resentment and rioting ensued in the nation already strained by the world's highest inflation rate, where a 100 bolivar note is valued at 2–4 cents in U.S. currency.

The public unrest prompted the government to reconsider its timeline, a report by The Guardian said. Now Venezuelans have until Jan. 2 to exchange currency. The government has closed the nation's borders until that date to prevent black market activity.

Maduro blames unspecified conspirators for "sabotage" that caused the delay in delivering Venezuela's new currency, the report said.

Topics: Vault Cash / Cash Management

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