Inflation-Plagued Venezuela to Print Larger Denomination Bills

Aerial view of Caracas from Plaza Venezuela.
Aerial view of Caracas from Plaza Venezuela. Photo by Paulino Moran

 

With inflation at 181 percent, Venezuela has the highest inflation in the world. A top finance official in the government said that due to the runaway inflation, Venezuela will be force to print paper money of larger denominations. Right now the country’s largest bill has a value of only ten cents.

The first confirmation that Venezuela will be issuing larger notes came from Central Bank President Nelson Merentes in an interview with the Associated Press. Rumors have been circulating for months that Venezuela was planning such a step.

Market economists believe that larger bills will only quicken the already nightmarishly skyrocketing inflation, make it more difficult to bring under control.

Merentes, disagreeing with that assessment, said the new money will reduce panic in the public, reducing price pressures since “you’re going to have less bills circulating.”

This is a big project that will take us to a monetary system more in line with the Venezuelan situation,” Merentes said.

Peter Jefferson

About Peter Jefferson

Peter Jefferson is a full-time researcher for www.businessdistrict.com, a task he took on in 2011 when the site was launched. He brings to the position a wealth of practical experience in the field of fiscal policy, having consulted with various government bodies on revenue collection, expenditure and economic growth. Contact Peter at peter[at]businessdistrict.com