Venezuela Demonetizes 100bs Banknotes, India-like Panic Awaits
Venezuela, which operates an economy that is crumbling down in debt and hyperinflation, announced the demonetization of 100 bolivar fuerte (Bf) banknotes effective in the next 72 hours. Until the central bank releases higher denomination bills, an India-like panic is presumed to occur. Since mid-2016, the Venezuelan economy worsened, as hyperinflation continued to lessen the value of its national currency that was already virtually worthless. By September, simple products like eggs or bread were sold at US$150 to the general population which in Venezuela was equivalent to stacks of cash.....
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The economy of Venezuela has been shred apart by a financial crisis resulted from the local government’s decision to demonetize the nation’s largest denomination banknote. However, after a plane carrying the newly printed banknotes failed to arrive, Venezuelan authorities officially declared the previously scrapped 100bs banknotes a legal tender once....
This plan by the Venezuelan government is a bold one, that will ultimately not entirely work as intended. The financial situation in Venezuela continues to go from bad to worse. Just last week, the government announced a new 20,000 bolivar bill to reduce the existing bank note supply. A new law will replace the current highest-denomination banknotes with coins in the following 72 hours. A similar strategy has been employed in India, which has not worked out at all. Replacing existing banknotes with coins seems like taking four steps backward. For the Venezuelan government, the decision....
India withdraws INR 500 and INR 1000 denominations from the monetary system overnight. It is set in introduce new banknotes after successfully weeding out "black money'. The World was taken by a surprise yesterday after the emerging economy, India in a drastic move declared its INR 500 and INR 1000 banknotes as invalid, starting midnight. With two of the largest denominations declared invalid, the public is in a state of panic especially those who are used to handling large amounts of cash. The move, targeted at tackling the growing menace of money laundering and currency....
Venezuela has ordered severe limits on bank withdrawals less than a week after India made changes to its cash currency precipitating long lines at the nation’s ATMs. Both of these government actions have led to an increase in interest on the digital currency, Bitcoin. Venezuela’s Superintendency of Banking Sector Institutions (Sudeban) forbade public and private banks from dispensing more than US $5.26 per day cash from branches or ATMs. Sudeban allows a maximum of four transactions allowing the withdrawal of up to approximately US $5. In the midst of crisis, Venezuela’s inflation has....
In a shock move, the Government of India has demonetized Rs. 500 and Rs 1000 banknotes. In India these are considered higher denomination banknotes, with the banknotes becoming obsolete starting from midnight on Nov. 9. The government has also announced the introduction of two new banknotes, Rs. 500 and Rs. 2000, to replace the demonetised money. Targeting so called ‘Black Money’. The government of India has taken this measure to effectively target people who conduct transactions primarily in cash and bypass the tax net. There is a belief within the government that most of this so called....