Hyperinflation-hit Venezuela starts issuing new currency

Venezuela's government yesterday started issuing new bank notes to replace the 100-bolívar bill, rendered virtually worthless by hyperinflation.

President Nicolás Maduro announced early last month that the government would issue new bank notes to replace the old ones, a measure that promised to lighten the load for many Venezuelans, who needed to carry with them bags of cash for even the simplest transactions.

The 100-bolivar note was worth around 2.8 US cents at yesterday's black market rate.

The new notes ranged from 500 to 20,000 bolívars, with the largest denomination bill worth about $5.60 on the black market. The bills, were, however, not available everywhere yesterday. One bank, which had received only the 500-bolívar bills, had run out of the currency by 2 pm.

Although the move was supposed to make life simpler, Maduro abrupt announcement that the 100-bolívar notes would be removed from circulation triggered chaos. Maduro said, the measure had to be adopted as organised crime groups were hoarding the 100-bolívar bills.

Venezuelans rushed to exchange their bills, banks, however, banks refused to accept them as they had no larger bills to offer in exchange. There were incidents of looting, and some people even burned the 100-bolívar notes, believing they were nothing more than paper after the announcement.

Meanwhile, Maduro made his annual address to the nation on Sunday, highlighting that his administration had managed to advance in social welfare provision even as it faced an acute economic crisis.

Maduro explained in a speech on national TV that in 2016, government increased social spending to 73 per cent of the national budget and built 370,000 homes as part of Venezuela's Great Housing Mission, while unemployment levels averaged at 4.5 per cent.

He said, his government this year, would launch a public works project in a bid to create 85,000 jobs, as well as work to improve the country's health service, access to medicines and social missions for the country's poorest families.