Nicolas Maduro announced on Saturday that the move to pull the 100 bolivar note from circulation by last Wednesday would be postponed until 2 January.
Amid an already acute cash shortage and substantial inflation, Maduro’s announcement triggered long queues at banks, nationwide protests, looting and violence as many Venezuelans found themselves unable to pay for basic necessities.
New, larger notes, expected to come into circulation last week, never arrived.
Maduro blamed foreign saboteurs for delaying planes carrying the new notes. He says international enemies are waging an “economic war” against the state.
The original justification for culling the note was to tackle smuggling by organised crime groups, which hoard the bills in order to purchase subsidised goods in Venezuela and sell them across the border for a profit.
As well as eliminating the 100 bolivar note, Maduro closed the border with Brazil and Columbia to prevent criminals bringing the notes they have stashed abroad back into Venezuela and exchanging them for the new legal tender.
The border with Columbia will remain closed until January, cutting many Venezuelans off from stocks of basic goods, including medicines and food staples like maize, rice and sugar, which have been in short supply within the country.
The note, the most common in circulation, had also been rapidly losing its value. In November, it lost 55% against the dollar and crashed to around 2 US cents on the black market.
Tumbling oil prices over the past two years have sent Venezuela’s oil-reliant economy spiralling into crisis.
It now has the highest inflation rate in the world, with the International Monetary Fund expecting it to rise to 1,640% in 2017. The fund also anticipates the country’s economy will shrink by 10% this year – the biggest contraction in more than a decade.
Maduro blames enemies overseas for the country’s economic decline, while critics and the country’s opposition blame decades’ worth of failed socialist economic policy.
On Saturday, opposition leader, Julio Borges, tweeted (in Spanish) that Maduro’s “improvisation” on the note cull had cost the country its peace and left the poorest suffering the most.
Maduro tu improvisación no solo robó la tranquilidad del país, mató y encarceló personas. Los que menos tienen hoy son los que más sufren.
— Julio Borges (@JulioBorges) 17 December 2016
