22/07/2018 08:09 AST

Venezuela could delay plans to introduce its new currency as banks haven’t received the new bills and quadruple-digit inflation heightens the need for new money, according to people familiar with the matter.

President Nicolas Maduro’s initial redenomination plan called for slashing three zeros from the “Strong Bolivar” notes now in use to be replaced with a new “Sovereign Bolivar”. Originally set for a June roll-out, the president in May then delayed it to August 4. Banks maintain they’ll need some lead time to ensure a smooth transition, according to four people familiar with the situation. A central bank press official declined to comment.

The government is also delaying the operation to consider knocking off more than three zeros from the currency to keep pace with inflation estimated at 60,770 per cent, meaning prices increase about 3.4 per cent every day, according to two people with direct knowledge of the discussions.

Beginning at the end of 2017, the government started ordering more than 4 billion new notes from suppliers including Basingstoke, UK-based De La Rue and Boston, Massachusetts-based Crane Currency, according to central bank documents and a person with direct knowledge of the purchases. While some of the bills have begun to arrive in Venezuela, experts say banks need 20 to 30 days to integrate them into their systems. De La Rue declined to comment while request for comment Crane Currency weren’t immediately returned.

The country’s acute shortage of paper money has added to the misery of Venezuelans, who depend on cash for public transport, gasoline and the purchase of subsided foods. Desperate citizens now pay markups of as much as 200 per cent for paper money in Caracas.

Late President Hugo Chavez took on a similar plan a decade ago, chopping three zeros off the currency and introducing the Strong Bolivar. Since his hand-picked successor, Maduro, took power in 2013, the currency has become virtually worthless amid crashing oil prices and unchecked state spending. In a speech last month, Maduro claimed electronic payments represented 85 per cent of transactions in the country, and would have to rise this year in order to “vaccinate Venezuela” against an attack on “paper money.”

Gulf News

Ticker Price Volume
SAMBA 29.80 1,824,433
SECO 18.40 732,542
SISCO 13.44 432,595
KEC 10.44 169,610
JADCO 23.24 26,909
EXTRA 54.30 397,415
FARM 18.72 38,399
US Dollar 1.00
Saudi Riyal 3.76
Derham Emirati 3.67
Qatari Riyal 3.64
Kuwaiti Dinar 0.30
Bahraini Dinar 0.38
Omani Riyal 0.39
Euro 0.86
British Pound 0.75
Japanese Yen 109.95
Lira collapse likely to have limited impact on GCC — Turkey trade


Direct non-hydrocarbon economic links between the GCC and Turkey are relatively limited; however the sharp decline in Turkish lira against the dollar in recent months is likely to impact GCC’s non-oi

Gulf News

Dollar's strength comes from unexpected quarters


Risk appetite was hit hard this past week as a new round of US led sanctions on Turkey spooked global markets. After several months of finding staunch resistance in the channel between 95 and 95.50,

The National

Indian rupee hits record low of 70 to the dollar


The Indian rupee hit a record low of 70 to the dollar on Tuesday as emerging market currencies are sold off by investors spooked by the Turkish financial crisis. The under-pressure rupee touched 70.0

Oman Daily Observer

South Africa's rand falls to 2-year low as Turkey rout spreads


South Africa's rand plunged more than 10 percent to a 2-year low against the dollar early on Monday and government bonds weakened sharply as a renewed rout in the Turkish lira spread to other emergin

The Peninsula

Kuwait denies cash buy to shore up lira


Kuwait has rebuffed as “ungrounded” reports that it injected KD 500 million ($1.6 billion) to back the Turkish currency of lira, which has been in free-fall over deteriorating ties with the US. Denyi

Arab Times