Venezuela makes currency changes to tackle inflation and profiteering.
| Autor | Gandin, Andres |
The opposition's inability to capitalize on popular discontent, and the discovery of criminal actions that, to some degree, confirm government claims that the political right and business class are waging an "economic war," have together helped Venezuelan President Nicolas Maduro maintain his tenuous hold on power and stave off calls for his removal.
Since November 2016, while the population continues to suffer from serious supply shortages and high inflation (NotiSur, May 22, 2015), the government has collected information on what it calls an "attack on the currency" (the Venezuelan bolivar) and on the increasing flow of contraband across the lengthy border with Colombia. The governments of both countries admit that smuggling, both in terms of volume and value, has reached a superlative level along the porous, 2,216-km border. Much of the illegal trade involves gasoline, which is cheaper in Venezuela than anywhere else in the world, and subsidized Venezuelan foodstuffs.
The Maduro administration responded to the situation by pulling the country's largest-denomination bills (100-bolivar notes, the equivalent of US$0.10) from circulation and introducing even larger-denomination notes and coins ranging from 500 to 20,000 bolivares. "They were being extracted from the country at an extraordinary rate," the president said of the 100-bolivar bills. The government also decided to authorize the use of foreign currency for border-area gasoline sales.
The moves come at time when billions of bolivares have turned up in countries like Brazil and Paraguay, stashed in places belonging to people in the criminal underworld, generally people who've been accused of drugs and arms trafficking and money laundering.
On Dec. 11, when Maduro announced his decision to withdraw the 100-bolivar notes, he expressed concern about actions taken in Colombia against the Venezuelan currency (via a central bank resolution passed in the year 2000) and the economy in general (via the extraction of bolivar notes and the illegal use of US dollars, dubbed "Cucuta dollars" in reference to the capital city of Norte de Santander, a Colombian department that borders Venezuela. "Along the border, currency-exchange decisions are made, not by Colombia's central bank, but by the exchange offices, which are controlled by mafia groups linked to the Venezuelan right," the president said.
Maduro estimates that more than 300 billion bolivares have been extracted from the country...
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