Loading articles...

Venezuelans confused over new bills under economic overhaul

Last Updated Aug 21, 2018 at 4:40 pm EDT

A woman shows a couple of new five "sovereign bolivar" Venezuelan bank notes, released from a government bank in Maracaibo, Venezuela, Tuesday, Aug. 21, 2018. The new currency will have two coins and paper denominations ranging from 2 up to 500. The lowest represents the buying power of 200,000 current bolivars while the highest stands in for 50 million. (AP Photo/Fernando Llano)

CARACAS, Venezuela – Venezuelans confused over the new banknotes popping out of their ATMs on Tuesday resorted to using calculators and conversion charts to figure out the value of each bill as the country’s new currency — with five fewer zeros — started circulating.

“I still don’t understand it very well,” said homemaker Maritza Vargas, withdrawing a 5 bolivar bill from her Caracas bank. “The truth is that I’m still not clear.”

The new currency is part of President Nicolas Maduro’s new plan meant to confront runaway inflation and a plummeting economy that has pushed tens of thousands of Venezuelans to flee abroad.

Maduro’s says he’ll also increase the minimum wage on Sept. 1 by more than 3,000 per cent, boost corporate taxes, set gasoline prices at international prices and impose new price controls.

But many economists say they fear the measures will bring more misery to the once-wealthy OPEC nation.

Maduro’s minister of communications, Jorge Rodriguez, said in a news conference that the economic measures were taken to improve the lives of Venezuelans.

He discounted an attempt by opposition leaders to undercut the government’s plan, who called for a widespread work stoppage and street protests, which didn’t appear to materialize.

“They promote destruction,” Rodriguez said of opposition leaders. “But the vast majority do not want the destruction of the country.”

As the new money went into use, banks capped customers’ daily ATM withdrawals at 10 bolivars — equal to roughly 15 cents on the commonly used black market.

At that rate it would take seven days to buy a 2 litre bottle of Coca Cola.

Venezuelans could make far larger purchases with debit cards, a long-favoured method when cash supplies are limited.

Venezuela’s largest bill was 100,000 bolivars — worth less than $3 cents — under the former currency. The new bills top out at 500 bolivars — currently worth about $7.50.

Inflation this year could top 1 million per cent, according to economists at the International Monetary Fund.

One bank passed out conversion charts to help customers, while other customers brought hand-held calculators, unsure how much basic goods like eggs and rice will costs in the new currency.

“We have to be on the look-out,” said Yulima Rivas at an ATM in Maracaibo. “If we make a mistake, it’s like being robbed.”

Opposition politicians had called for a work stoppage and protests on Tuesday across Venezuela, drawing on tension and nerves caused by the new economic plan.

Despite the call, the streets appeared calm even if businesses in Caracas appeared slow to reopen following a bank holiday a day earlier to allow for the conversion.

Maduro’s socialist party called its own rally on Tuesday in a show of support for the embattled president, the subject of a failed drone attack in early August.

Caracas resident Carlos Espana held up crisp bolivar notes he’d taken from the bank, but he worried that the government’s plans would spur faster inflation.

“More confusion. Higher costs,” he said, noting that he would have to stand in line at an ATM for two separate days to buy a single empanada.