The seeds may be sown for cash crunches in Venezuela, which has been plagued in the recent past by inflation and other currency-related issues.
In a recent Bloomberg report, just a day before a systematic debut of large denomination bills combating inflation, the physical currency itself had yet to be placed at banks as new legal tender. And, said the newswire, it remained unclear as to whether the notes were in place — that is, in Venezuela — to distribute in the first place. The 100-bolivar note has been nullified, and at the same time, that announcement has taken the nation by chaotic surprise as people have queued up at banks and cash machines. The 100-bolivar notes, currently the highest denomination in the country, were to be replaced by 500-bolivar notes to bills as high as 20,000 bolivars.
And yet, Crane Currency, which has been tapped to be one of the suppliers to bring the bills into the country, had yet to do so as of Wednesday (Dec. 14) ahead of an official launch of the notes on Thursday. Unnamed sources said the notes were being loaded to be shipped to Caracas. In the meantime, banks have been limiting the amount of 100-bolivar notes they will accept for exchange. Those notes have dwindled in purchasing power to as few as pennies per note.
In an effort to spur other types of transactions, the government said it would cut the sales tax on purchases made using debit or credit cards.