Venezuela will introduce six new notes and three new coins from mid-December to help alleviate practical problems in doing business with the world’s most inflationary currency, according to the central bank.
Currently, the Opec nation’s largest note is worth just 2 US cents on the black market, meaning cash transactions are extremely cumbersome.
The bolivar currency has suffered its most dramatic monthly fall in history, down 60% since early November against the dollar on the black market, as the country struggles with a major economic crisis that is leaving millions hungry and the medical sector in crisis.
The largest of the new bills, according to a central bank communique, will be worth 20,000 bolivares, just under $5 (£3.90) on the streets. It will be accompanied by notes of 10,000, 5,000, 2,000, 1,000 and 500 bolivares and three coins of smaller value.
“[This] will make the payments system more efficient, facilitate commercial transactions and minimise the costs of production, replacement and transfer ... which will translate into benefits for banking, trade and the general population,” the central bank said.
Paying a restaurant or supermarket bill without a debit or credit card can often require a backpack full of cash. However, even getting cash at ATMs in recent months has proved difficult.
On Friday, the country’s point-of-sale machines suffered chronic malfunctions. Unable to process transactions, businesses asked customers to use cash, transfers or pay later.
The president, Nicolás Maduro, blamed the problems on a cyber-attack, but he did not provide any evidence. He attributed the country’s economic crisis to an “economic war” led by the opposition with a helping hand from Washington.
Strict currency controls introduced in 2003, which pegged the bolivar to the dollar, coupled with heavy reliance on oil, are seen as the root of the crisis by most economists.
Venezuela’s central bank has failed to publish any inflation data for 2016. The International Monetary Fund estimates that price rises next year will surpass 2,000%.
The money supply, the sum of cash and checking deposits as well as savings and other “near money” deposits, was up 12% in the two weeks to 25 November and the curve is exponential since Maduro’s predecessor Hugo Chavez came to power in 1999.