World Economy
0

Venezuela Warns Businesses Not to Halt Payments

Venezuela Warns Businesses Not to Halt Payments Venezuela Warns Businesses Not to Halt Payments

Venezuela warned businesses 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.

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, Reuters reported.

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.

Businesses “should take provisions so that the monetary conversion does not affect, slow or suspend customer service, payment or billing,” the government’s consumer protection agency, Sundde, said in a statement.

  Collapse of Socialist Economic System

The information ministry did not immediately respond to a request for comment.

Venezuela has annual inflation near 14,000%, according to the opposition-controlled legislature, amid a collapse of its socialist economic system that has left millions of people struggling to eat properly.

Cash is increasingly difficult to obtain because new banknotes have not been printed fast enough to keep up with price increases, spurring a growing use of cellular phone apps.

Some stores and bus companies were no longer accepting cash out of fear the notes would be worthless next week. Others worried that problems with cash payments could lead to increased use of the already overloaded digital systems such as bank transfers and debit card payments, potentially crashing bank websites.

“There are rumors that transfers will be impossible for several days and that would be terrible because people pay by electronic transfers,” said messenger Antoni Zambrano, 22, in Tachira state near the Colombian border.

“We demand that the monetary overhaul scheduled for June 4 be postponed,” tweeted opposition lawmaker and economist Jose Guerra. “It’s not possible to do it well.”

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com