Paper Money

New bank notes in Venezuelan crisis

The Central Bank of Venezuela is issuing yet another round of high-denomination notes as inflation continues unchecked.

Images courtesy of Central Bank of Venezuela.

The Central Bank of Venezuela issued three new denominations June 13. The bank says the reason is “to make more efficient payment system and facilitate business transactions.” The real reason is that the inflation rate has rendered the notes already in circulation worthless.

The new denominations are 10,000, 20,000, and 50,000 bolivares soberanos (sovereign bolivars), that in U.S. dollars equal $1.62, $3.24, and $8.11, respectively. The new notes will enter circulation gradually. 

All bear a large and small portrait of Simon Bolivar in a vertical orientation. They are blue, green, and orange in color, in ascending order.

The sovereign bolivar was introduced last August when the inflation rate forced the inept Maduro government to drop five zeroes from the old “bolívar fuerte” (strong bolivar) and replace it with the bolivar soberano in values of 500, 200, 100, 50, 20, 10, 5 and 2 bolivares soberanos. These were the notes that forced bank note printer De La Rue to write off £18 million ($22.75 million) when it could not get paid. There is no information regarding who printed the latest issue.

Venezuelans are greeting the new notes with skepticism. The CBC, Canada’s publicly owned news and information service, reports that although the notes were supposed to be circulating already, none was to be found in Caracas. People have become so disinclined to drag around massive amounts of cash that many are now using debit cards instead. 

The CBC quoted the blunt assessment of Caracas Chronicles, an independent news outlet, the Central Bank of Venezuela can “keep issuing higher denomination bills or carrying out new reconversions, but the problem is hyperinflation and [President Nicolás Maduro] has done nothing to solve it.”

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