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Venezuela fights inflation with bigger money

Fabiola Sanchez
Associated Press

Caracas, Venezuela — Venezuelans stood in long ATM lines Monday to take out new, larger-denominated bills President Nicolas Maduro hopes will help stabilize the crisis-wracked economy.

Maduro last month said he was scrapping circulation of the most used bill, the 100-bolivar note, and replacing it with new bills ranging from 500 to 20,000 bolivars.

Residents in Caracas expressed shock at seeing bills with so many zeros — a sign of how worthless the bolivar has become amid triple-digit inflation and a collapse in foreign exchange reserves that has led to severe food shortages.

“I never thought I’d have such a big bill in my hands,” Milena Molina, a 35-year-old sales clerk, said as she inspected crisp, new 500-bolivar notes she had just withdrawn. “But with the inflation we’re suffering, the notes we had weren’t worth anything and you always had to go around with huge packages of bills.”

Monday’s rollout of the first batch of imported notes came weeks later than the government had promised. Maduro last month ordered the 100-bolivar note to be withdrawn from use well before the replacement bills were ready, leading to widespread chaos as Venezuelans rushed to spend the bills before they were taken out of circulation.

With cash running out, looting and protests were widespread and Maduro had to backtrack. On Sunday, he extended for the third time, until Feb. 20, the deadline for the 100-bolivar note to remain legal tender.

While the new denominations should make cash transactions easier, the relief may be short-lived: the 20,000-bolivar note is worth less than $6 on the widely used black market, where Venezuelans turn when they can’t purchase dollars at the tightly controlled official rate.