(Bloomberg) -- A Venezuela bolivar note worth $2.42 on the black market will begin circulating as early as Thursday, lightening the load for people who carry backpacks full of cash for their daily errands.
The 100,000-bolivar denomination, which will be the country’s largest, seeks to stabilize the cash supply, President Nicolas Maduro said on state television. He blamed Colombia President Juan Manuel Santos for the monetary “attack,” alluding to the black market trading of the bolivar on the countries’ shared border.
“We have been updating the monetary cone while facing this attack on the currency,” Maduro said, suggesting that a “definitive solution” would mean almost completely eliminating cash transactions by next year.
Inflation, which the IMF estimated may exceed 2,300 percent next year, has caused cash shortages while the arrival of higher denomination bills has done little to solve the problem. The government is also hoarding dollars from oil exports and loans to make a $1.2 billion debt payment due Thursday.
Venezuela’s bolivar is worth 41,290 to the dollar on the black market, while the government’s weakest of two official exchange rates is 3,345 bolivars to the dollar.
Earlier, Maduro announced a 30 percent minimum wage increase ahead of December municipal elections and the holiday season. He also approved a one-time 500,000-bolivar “special Christmas bonus” to benefit 4 million households, adding that the government would give every child a toy and each household up to six kilograms of pork shoulder, a season favorite.
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