Author Topic: Venezuela to Issue Banknotes in Higher Denominations  (Read 983 times)

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Offline Bimat

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Venezuela to Issue Banknotes in Higher Denominations
« on: August 27, 2015, 04:46:58 PM »
Venezuela is adding zeroes to its banknotes to deal with hyperinflation

Aug 27 2015 at 6:20 AM
Updated Aug 27 2015 at 4:08 PM

Venezuela is preparing to issue bank notes in higher denominations next year as rampant inflation reduces the value of a 100-bolivar bill to just 14 US cents on the black market.

The new notes -- of 500 and possibly 1,000 bolivars -- are expected to be released sometime after congressional elections are held on December 6, said a senior government official who isn't authorised to talk about the plans publicly.

Many Venezuelans have to carry wads of cash in bags instead of wallets as soaring inflation and a declining currency increase the number of bills needed for everyday purchases. The situation is set to get worse. Inflation, already the fastest in the world, could end the year at 150 per cent, said the official.

The government stopped releasing regular economic statistics in December, when it reported inflation had reached 69 percent.

A customer would need at least 1,280 bank notes to purchase a 24-inch Samsung television on sale at a mall in eastern Caracas for 128,000 bolivars. Some banks, meanwhile, have reduced daily withdrawal limits at ATMs because of shortages of the highest denominated notes.

The country is not planning to change it's three-tiered exchange rate system in the short term, said the official, adding that the government is working on plans to increase dollar revenue by developing mining and petrochemical projects and reduce its dependence on oil.

One US dollar is currently worth 725 bolivars on the black market, which Venezuelans use when they can't get government approval to purchase foreign currency at the three official exchange rates of 6.3, 12.8 and 200.

Venezuela's monthly minimum wage of 7,422 bolivars equates to about $US37 at the weakest legal exchange rate and is only $US10 at the black market rate.

A unified exchange rate would not be possible until the economy becomes more diversified and domestic production rises, said the official.

Press officials at the central bank and finance ministry declined to comment when contacted by telephone Wednesday.

The black market rate is being manipulated by traders in Cucuta, Colombia and the Miami-based website dolartoday.com, the official added. While the rate has become a reference for some minor sectors of the economy, it's a small market and not representative of the overall economy, the official said.

Venezuela maintains its willingness to pay foreign debt and is buying back bonds when it can, said the official, adding that the government could consider selling or swapping gold reserves if it needed to. Gold currently held in Caracas could easily be transported abroad if the need arose, the official said.

The country's foreign reserves fell to a 12-year low of $US15.4 billion on July 27 and have since rebounded to about $US16.5 billion, according to data compiled by Bloomberg.

New loans from China will slowly be reflected in the country's reserves, the official said.

Source: Financial Review
« Last Edit: December 02, 2016, 03:37:17 PM by Bimat »
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Offline Bimat

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Venezuela to Issue Banknotes in Higher Denominations
« Reply #1 on: November 02, 2016, 06:56:07 AM »
According to this article in the The Wall Street Journal, central bank of Venezuela has awarded the contract to print higher denomination banknotes to Boston based Crane Currency.

(The full story is available only after subscription).

Aditya
It is our choices...that show what we truly are, far more than our abilities. -J. K. Rowling.

Offline Bimat

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Venezuela to Issue Banknotes in Higher Denominations
« Reply #2 on: December 02, 2016, 03:34:53 PM »
Venezuelan Inflation Hits Currency With Arrival of Bigger Bills

December 1, 2016, 1:06 am
Updated on: December 1, 2016, 6:46 pm

(Bloomberg) -- After years of soaring prices reduced the value of the largest 100-bolivar bill to just a few U.S. cents, Venezuelan authorities are finally preparing to issue larger-denomination bank notes, much to the relief of shoppers.

The notes-500 and 5,000 bolivars will be released toward the middle of next month, said a senior government official who isn’t authorized to talk about the plans publicly. Additional bills of 1,000, 2,000, 10,000 and 20,000 bolivars will enter circulation in the first half, the official said.

The refusal of the authorities to issue bigger bills had forced Venezuelans to ditch wallets in favor of bags of cash for everyday transactions. Things have got so bad that some shopkeepers weigh wads of bank notes instead of counting them to save time.

Inflation will probably end the year at 368 percent, according to the median estimate of 14 analysts who responded to a Bloomberg survey. While it will accelerate further next year, it won’t reach four digits, said the official.

Venezuela’s money supply has risen 130 percent over the past year, according to the latest data available from the Central Bank in Caracas and compiled by Bloomberg. On the black market, where a dollar costs more than six times as much as the weakest legal rate of 662 bolivars per dollar, the currency has slumped 65 percent this month alone.

To read about Venezuela’s collapsing currency, click here.

The new bills will have a similar design to the notes currently in circulation but will have different colors, the official said.

Dollar-Only Resorts

International reserves hovering near a 14-year low of around $10.9 billion probably won’t fall much further, the official said, declining to specify the current composition.

The weakening of the currency, rising inflation and declines in real purchasing power will not likely stop until the government sees more dollars flowing into the economy through higher oil prices or other economic activities, the official said. While crude exports account for about 95 percent of the country’s foreign currency earnings, the government eventually wants to bring that rate down to 40 percent by developing mining, tourism, and agricultural exports, according to the official.

The government will use a new currency law signed by President Nicolas Maduro on Monday to allow for the increased the use of U.S. dollars in the tourism sector, the official said, adding that duty free stores at airports would begin to price and sell products in dollars to both traveling Venezuelans and foreign visitors.

The government is also planning to designate and develop certain tourist areas, including Margarita Island’s Macanao Peninsula and nearby La Tortuga island, as dollar-only resort zones where visitors of any nationality -- including Venezuelans -- will pay for goods and services in dollars, the official said. Most tourist areas that Venezuelans currently frequent, including the Los Roques archipelago, will continue to price goods and services in bolivars, although dollars will be accepted, the official added.

Source: Bloomberg
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Offline Jostein

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Re: Venezuela to Issue Banknotes in Higher Denominations
« Reply #3 on: November 07, 2017, 10:44:25 AM »
Bs100.000 added (apr. $5) ... ::)

The design is identical to Bs100 but adding the word "MIL" to word "CIEN". Colour yellow.

http://www.bcv.org.ve/c3/ampliacion/pdf/nuevadiagramacioncien.pdf
"Change is the law of life. And those who look only to the past or present are certain to miss the future" - John F. Kennedy

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Offline augsburger

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Re: Venezuela to Issue Banknotes in Higher Denominations
« Reply #4 on: November 16, 2017, 03:07:15 PM »
Bs100.000 added (apr. $5) ... ::)

The design is identical to Bs100 but adding the word "MIL" to word "CIEN". Colour yellow.

http://www.bcv.org.ve/c3/ampliacion/pdf/nuevadiagramacioncien.pdf

I laughed when I saw it. They have 100 written as if it's still 100 and then "cien mil" written underneath it. Maduro is that typical guy who will play politics until the cows come home, pretending he's doing a good job by forcing people to believe nothing's wrong, when everyone can see it.