Latin America & Caribbean

Venezuela: President Maduro extends money swap deadline

A man protests against the lack of cash in Venezuela, 17 Dec 2016 Image copyright AFP
Image caption Protests against the measure have prompted the government to delay the swap twice

Venezuelan President Nicolas Maduro has again extended the deadline to withdraw from circulation the country's most common currency note.

The deadline had been set for 2 January but will now be on 20 January.

Mr Maduro said he did not want Venezuelans to worry about exchanging the currency near the New Year festivities.

Venezuelans had been initially given 72 hours in mid-December to swap their 100 bolivar notes, sparking chaos.

The borders with Colombia and Brazil were also closed for eight days as part of a coordinated action against what Mr Maduro called "smuggling mafias".

They sell products subsidised by Venezuela's socialist government, including petrol and medicines, at high profit margins.

Rampant inflation

Mr Maduro also said that the gangs had hoarded huge amounts of cash in warehouses abroad,

They would lose most of that money once it was withdrawn, as it would be impractical for them to repatriate truck loads of currency notes and swap them at bank branches, he said.

After Mr Maduro's announcement on 11 December, most shop owners in Venezuela began rejecting the notes.

Long queues formed outside bank branches, while in some areas supermarkets and shops were looted.

Image copyright EPA
Image caption Hundreds of people queued when the Colombia-Venezuela border was eventually reopened

Mr Maduro then decided to delay the deadline to scrap the 100-bolivar note.

He has ordered new higher denomination notes, but they are not yet in circulation.

Venezuela has one of the highest inflation rates in the world.

The government last published figures for inflation in December 2015, putting it at 180%, but the International Monetary Fund (IMF) estimates next year's prices will rise by more than 2,000%.

The 100-bolivar note has lost most of its value and is now worth around 2 US cents on the black market.

The Venezuelan economy has been hit hard by the fall in the price of oil, its main source of income. It also has had strict currency controls in place since 2003.

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