Central Bank of Venezuela expands VEB 100-bill issue by 97%
Venezuelan authorities are pondering the creation of VEB 200 bills
In January 2008, Venezuelan authorities implemented a monetary reconversion and launched the so-called bolívar fuerte (strong bolivar), as a symbol of new times of prosperity and stability, yet bolivars are not enough to meet people's needs.
Official data shows that in 2012 the Central Bank of Venezuela (BCV) printed over 272 million bills of VEB 100 –a 97% increase compared to the number of bills printed in 2011 and three times more that the amount issued in 2010.
The family grows
In an economic climate where it all seems that the rise in prices will not stop, the central bank has begun to ponder the design of a new bill, with a face value of VEB 200 (USD 0.03).
BCV's sources explained that inflation continues high. In the short term, the number of VEB 100 bills circulating in the economy would increase to levels that will make the monetary distribution quite inefficient.
Models indicating when a country should issue bills of higher denominations in order to mirror the fall of the purchasing power due the impact of inflation show that Venezuela requires VEB 200 bills.
Should authorities fail to adopt this measure, in some two years, six out of every 10 bills circulating in the economy will be issued VEB 100 bills. Therefore, when people withdraw money from an ATM, they will need a high number of bills to buy the same number of things they can buy today.
José Vicente Rangel clearly said: "We are not conducting negotiations threatened with a gun in the head." He warned behind closed doors in the midst of the social upheaval occurred during the oil strike in 2002 and 2003. Dissenting Timoteo Zambrano answered back that no other option was available: "The thing is that otherwise, you do not negotiate."