Venezuela delays removing currency bills amid crisis, protests

Venezuela's President Nicolas Maduro speaks during a meeting with ministers at Miraflores Palace in Caracas, Venezuela on Dec 17, 2016.
Venezuela's President Nicolas Maduro speaks during a meeting with ministers at Miraflores Palace in Caracas, Venezuela on Dec 17, 2016. PHOTO: REUTERS

CARACAS (AFP) - With protests rocking his unpopular government, embattled President Nicolas Maduro on Saturday (Dec 17) pushed back to next month taking Venezuela's highest denomination bill out of circulation.

Maduro, who spoke after a meeting with administration officials, said he also would keep the borders with Brazil and Colombia closed until Jan 2.

The president, whose popularity has plummeted, says the 100-bolivar note had to be killed because "mafias" are hoarding it abroad in what he calls a US-backed plot to destabilise Venezuela.

The 100-bolivar note is worth about 15 US cents at the highest official rate (S$0.22), and until recently accounted for 77 per cent of the cash in circulation in Venezuela.

Late Friday, Maduro blamed opposition politicians for the unrest, claiming that there were pictures and videos of some opposition members of the National Assembly involved in "attempts of vandalism and some acts of violence."

Maduro has presided over an unravelling of Venezuela's oil-rich economy as crude prices have plunged. He and predecessor Hugo Chavez have made the economy increasingly state-led.

Now the import-dependent country is desperately short of food, medicine and basic household goods.

Venezuela currently has the world's highest inflation rate, set to hit 475 per cent this year, according to an IMF forecast.

The government is trying to introduce new bills in denominations up to 200 times higher than the old ones.

But the plan went off the rails when Maduro ordered the 100-bolivar note removed from circulation before the new bills arrived.

In a country with one of the highest rates of violent crime in the world, shoppers must carry round unwieldy wads of bills to pay for their purchases.

Retirees had complained for months that their pensions were paid in unmanageable 50- and 20-bolivar denominations.

Angry protests erupted around the country as the chaotic reform left people without money to buy food or Christmas presents.

In the southern state of Bolivar, a lawmaker and councilman said that four people died in rioting there. Authorities had not yet confirmed the deaths.