{"id":986,"date":"2017-10-27T01:32:41","date_gmt":"2017-10-27T01:32:41","guid":{"rendered":"http:\/\/baileyonlineclassroom.com\/theamericasblog\/?p=986"},"modified":"2017-10-27T03:30:33","modified_gmt":"2017-10-27T03:30:33","slug":"venezuela-the-country-literally-running-out-of-cash","status":"publish","type":"post","link":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/2017\/10\/27\/venezuela-the-country-literally-running-out-of-cash\/","title":{"rendered":"Venezuela: The country literally running out of cash"},"content":{"rendered":"

VENEZUELANS already struggling to find food, medicine and other basic necessities have a new shortage to worry about: cash.Troubling shortfalls of Venezuelan bolivars are forcing many in this distressed South American nation to form long lines outside banks several times a week to withdraw what little cash is available.<\/span>Others are resorting to bartering goods and services to skirt cash transactions.<\/span>\u201cAs if we didn\u2019t have enough problems already,\u201d said Roberto Granadillo, 37, a watchmaker. \u201cNow we can\u2019t even find bills.\u201d<\/span>Venezuelan President Nicolas Maduro has blamed the cash crunch on mafias moving bills overseas in an attempt to derail the nation\u2019s economy, though he\u2019s presented only scant evidence to back the claim.<\/span>What is certain is that the country\u2019s triple-digit inflation continues to skyrocket, meaning Venezuelans must find larger quantities of the scarce bills to purchase even relatively inexpensive items like bread or a cup of coffee \u2014 or turn to electronic transfers from their bank accounts.<\/span>The Venezuelan government released new, higher denomination bills in values of 500, 5000 and 20,000 bolivars earlier this year after the currency meltdown left the country\u2019s then-largest note worth around 2 US cents (less than 3 Australian cents) on the black market.<\/span>But now even the freshly minted bills, printed in rainbow hues and imported in part from the US, are quickly dwindling in value.<\/span>In January, one US dollar was worth 4,578 bolivars on Venezuela\u2019s pervasive black market; by October a US dollar got you 29,170 bolivars, according to Dolar Today, a website critical of the government that tracks the black market rate.\u00a0<\/span>Analysts project Venezuela\u2019s inflation could surpass 1000 per cent this year and many Venezuelans worry recently announced sanctions by the Trump administration prohibiting US banks from issuing new credit to the Venezuelan government or its state oil company will deepen the economic crisis.\u00a0<\/span>Venezuela is in the midst of a financial crisis.<\/span>Source:Supplied\u00a0<\/em><\/span>In September, Venezuelan authorities enacted stricter banking and business regulations in an attempt to stem the tide of bolivar bills. Officials are also considering printing bills in even higher values.\u00a0<\/span>The cash shortage is already being felt in the daily lives of Venezuelans like Granadillo, who said his weekly income has slipped more than 50 per cent as customers use the bills they are able to obtain to purchase food instead of comparative luxuries like a watch repair.\u00a0<\/span>Instead of cash, he has recently begun accepting a new form a payment: a kilo of ham, chicken or beef in exchange for a newly ticking watch. \u201cYou have to find a way to eat,\u201d Granadillo said.\u00a0<\/span>At the start of 2017, a 20,000 bolivar bill \u2014 the equivalent of about A$7.73 and the largest denomination of Venezuelan currency \u2014 could easily purchase five basic food products: rice, coffee, corn flour, sugar and pasta.\u00a0<\/span>Now Jose Guerra, president of the opposition-controlled National Assembly\u2019s Finance Commission, estimates a 20,000-bolivar note only has the purchasing power to obtain just one of those, and half a standard-sized portion of another.\u00a0<\/span>He said the bolivar\u2019s value has crashed 75 per cent between January and August, and banks were limiting the amount of cash they let customers withdraw because the Central Bank was not providing enough bills.\u00a0<\/span>\u201cYou need a lot more bills,\u201d Guerra said. \u201cAnd they aren\u2019t there.\u201d\u00a0<\/span>The escalating cash crunch comes on the heels of four months of political upheaval that left at least 120 people dead in near-daily protests decrying Maduro\u2019s rule. In early August, a new, all-powerful constitutional assembly was installed following a vote boycotted by the opposition. One of the new assembly\u2019s first acts was to declare itself superior to all other branches of government, making the nation\u2019s already weakened legislature an essentially powerless institution.\u00a0<\/span>Jose Gil, director of Venezuelan polling firm Datanalisis, said the cash shortfall carried a \u201cvery high price\u201d for Maduro\u2019s government but the opposition had not been able to capitalise on the discontent.\u00a0<\/span>Venezuela\u2019s Central Bank injected 849 million bills in varying denominations into the nation\u2019s economy up until August, three times the amount released over the same time period in 2016 \u2014 yet still not enough to keep up with inflation.\u00a0<\/span>It\u2019s not uncommon to see Venezuelans paying for goods with large wads of cash, and authorities have opened investigations into citizens caught hoarding substantial amounts, even if they add up to relatively small dollar values.\u00a0<\/span>In one high-profile probe, prosecutors last month seized 200 million bolivars \u2014 the equivalent of about A$10,3000 at the black market rate \u2014 from activist Lilian Tintori, the wife of Leopoldo Lopez, the country\u2019s most prominent political prisoner. The cash was found in steel-clad wooden boxes in the back of her car. Tintori claimed the investigation was part of a pattern of persecution against her family and that the cash was needed to pay for emergencies including the hospitalisation of her 100-year-old grandmother.\u00a0<\/span>Venezuelan Banking Superintendent Antonio Morales recently told Union Radio that bolivar notes leaving banking institutions are not being returned, as typically happens when cash shifts from customers to commercial businesses and back to banks.\u00a0<\/span>He said investigators have uncovered evidence that contraband networks are moving paper cash out of Venezuela and into Colombia. Officials recently detained 121 people allegedly involved in currency crimes, though no details on the charges were released.\u00a0<\/span>Morales also blamed some local businesses for hoarding cash. Meanwhile, Venezuelans like Maria Castillo, who works in the kitchen at a public hospital, are struggling to purchase food to sustain their families with the little cash they are able to obtain. The 70-year-old recently waited in an hour- long line at her bank to take out the maximum allowed: 10,000 bolivars \u2014 the equivalent of A$3.86.\u00a0<\/span>A day later, she was back in line at the bank.\u00a0http:\/\/www.news.com.au\/travel\/world-travel\/south-america\/venezuela-the-country-literally-running-out-of-cash\/news-story\/01f465fd917563444d56389bd4a14c50<\/a><\/span>\u201cI could only buy a package of rice,\u201d Castillo said. \u201cNow I\u2019m waiting in line again for the same amount.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

VENEZUELANS already struggling to find food, medicine and other basic necessities have a new shortage to worry about: cash.Troubling shortfalls of Venezuelan bolivars are forcing many in this distressed South American nation to form long lines outside banks several times a week to withdraw what little cash is available.Others are resorting to bartering goods and services to skirt cash transactions.\u201cAs… Read more »<\/a><\/p>\n","protected":false},"author":72,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[26],"class_list":["post-986","post","type-post","status-publish","format-standard","hentry","category-article","tag-the-americas-blog"],"_links":{"self":[{"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/posts\/986","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/users\/72"}],"replies":[{"embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/comments?post=986"}],"version-history":[{"count":1,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/posts\/986\/revisions"}],"predecessor-version":[{"id":987,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/posts\/986\/revisions\/987"}],"wp:attachment":[{"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/media?parent=986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/categories?post=986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/baileyonlineclassroom.com\/theamericasblog\/wp-json\/wp\/v2\/tags?post=986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}