The new 20,000 bolivares note, which will have a value of just under $5, will be joined by five other new notes and three new coins that the once oil-rich nation hopes will make doing business less cumbersome.
At present, Venezuela’s largest note, worth 100 bolivares, is worth just two US cents on the black market after the currency crashed to an all-time low late in November. Last Monday, the bolívar had lost 15% against the dollar.
A statement from the country’s central bank said the introduction of the new notes and coins will make payments more efficient, facilitate commercial transactions and minimise the costs of production and transfer.
This will “translate into benefits for banks, trade and the population in general”, the statement said.
New 500, 1,000, 2,000, 5,000 and 10,000 notes will also be “progressively” introduced, along with coins with a value of 10, 50 and 100 bolivares.
The bank said the new currency will coexist with the notes and coins currently in circulation, which have become worth so little that bags full of cash have to be used to make everyday purchases.
The country’s heavily oil-reliant economy began its downward spiral in 2014 with the collapse in commodity prices, although economists also point to strict currency controls starting in 2003.
Critics of the president, Nicolás Maduro, argue two decades’ worth of failed socialist economic policies are the main factor in the country’s decline.
The International Monetary Fund is expecting the country’s economy to shrink by 10% in 2016 – the biggest contraction in more than a decade – and for inflation to top 1,640% in 2017.
