Venezuela's highest denomination banknote withdrawal causes chaos

PanARMENIAN.Net - Venezuela's highest denomination banknote has ceased to be legal tender, in a move that has caused cash chaos and long queues at banks, BBC News reports.

Protests against the move led to looting in parts of the country, with shops attacked and roads blocked.

Some cash machines on Thursday, December 15 were still issuing the old 100-bolivar notes, hours before they expired.

President Nicolas Maduro said new higher-denomination bills would be fully distributed in January.

He has closed the borders with Brazil and Colombia until Sunday to stop "mafias" hoarding the currency abroad.

Anger over the move led to skirmishes in six cities on Friday, the Associated Presss reported the authorities as saying, with 32 people being taken into custody and one injured.

The sense of frustration has been compounded because there has been no official explanation as to why bank branches throughout Venezuela do not yet appear to have the larger denomination bank notes intended to replace 100-bolivar notes.

The opposition argues the currency initiative is another sign that President Maduro is ruining the economy and must be ousted.

But President Maduro praised Venezuelans for their understanding in a televised address on Thursday.

He said the new bills were already being distributed and would be fully circulated in January. However, the replacement bills have yet to be seen in the streets.

He also extended the border closure with Colombia and Brazil - in place since Tuesday - by another 72 hours.

Central Bank data suggests there are more than six billion 100-bolivar notes in circulation, making up almost half of all currency.

Buying almost anything with cash means a dangerous exercise carting around hundreds or thousands of bank notes in a country where robbery and violent crime is rife, BBC said.

President Maduro has blamed currency speculators and gangsters in neighbouring Colombia for inflation that has reached 500%.

Economic experts, however, say the measure to take the note out of circulation will have little positive effect on the country's chronic economic and political problems.