Venezuela warns businesses not to halt payments amid currency overhaul

[Eugene]

Source: Reuters

BUSINESS NEWS MAY 28, 2018 / 4:15 PM / UPDATED 3 HOURS AGO

Venezuela warns businesses not to halt payments amid currency overhaul

Reuters Staff
3 MIN READ

CARACAS (Reuters) - Venezuela warned businesses on Monday not to slow operations during next week’s monetary overhaul to remove three zeros from the hyperinflationary economy’s prices, a measure critics say could create chaos because it is being implemented so quickly.

Socialist President Nicolas Maduro said in March the bolivar currency would be redenominated on June 4, and the central bank has been tweeting pictures of the new banknotes emblazoned with Venezuelan historical figures.

But the banks have not received the new bills and have not had a chance to adjust cash machines for them, according to two finance industry sources.

Opposition critics say Maduro is at risk of repeating the chaos of late 2016, when the government withdrew the largest bill from circulation, sparking long lines, looting and protests that led to at least three deaths.

Maduro, who says the country is the victim of an “economic war” led by his political adversaries, blamed the 2016 problems on sabotage by enemies and ultimately postponed the measure.

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Read more: https://www.reuters.com/article/us-venezuela-economy/venezuela-warns-businesses-not-to-halt-payments-amid-currency-overhaul-idUSKCN1IT1ZI

[GatoGordo]

1. There is nothing that businesses can do

1. There is very little currency in circulation due to hyperinflation (18,000%)
2. There is NO new currency in circulation yet
3. Businesses are loath to accept any old cash, as they fear (rightfully) that they will be stuck with it. (This happened after Maduro decreed that the previoulsy high denomination bill was going to be worthless after a certain date)

Fear not. Maduro will blame the business mafias, "economic war" and (fill in the blank with today's boogieman) for Chavismo's economic malfeasance.