Facing some of the highest inflation in the world as part of a deepening ongoing financial crisis, Venezuela will be pulling its largest bill from circulation this week as it prepares to introduce new, higher value notes, according to President Nicolás Maduro. The current value of Venezuela’s highest bill on the black market is about 2 U.S. cents.
Maduro has said that the 100-bolivar note will be taken out of circulation on Wednesday — from there, Venezuelans will have 10 days after that to exchange those notes at the central bank.
“I have decided to take out of circulation bills of 100 bolivars in the next 72 hours,” Maduro said. “We must keep beating the mafias.”
The move has drawn more criticism for the already embattled Maduro administration, which claimed that the reset on the currency is necessary to fight contraband of the bills at the volatile Colombia-Venezuela border. Critics have called the move economically nonsensical.
They’ve also added that with more than 6 billion 100-bolivar bills in circulation at present, there would be no way to swap them all out of circulation in the time the president has allotted.
Nevertheless, as of Thursday, six new notes and three new coins are coming to the market. The largest bill will be worth 20,000 bolivars — or about $5 U.S.
The inflation data for 2016 in Venezuela remains uncalculated at this point, though economists estimate it is in the triple-digit range. Economic consultancy Ecoanalítica estimates annual inflation this year at more than 500 percent.
“When ineptitude governs! Who would possibly think of doing something like this in December amid all our problems?” two-time opposition presidential candidate Henrique Capriles wrote on Twitter, referring to the upcoming Christmas holiday.
Maduro has pointed the finger at organized crime networks at the Colombia-Venezuela border which buy up Venezuelan notes to in turn buy subsidized Venezuelan goods and sell them for vast profits in Colombia.
Strict currency controls introduced in 2003 have pegged the bolivar to the dollar for the last 13 years. The nation has also been heavily reliant on the sale of petroleum — and the recent price drop is seen as what set off Venezuela’s crash. Maduro has blamed an “economic war” being waged against his government by the opposition and the United States.