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Venezuelans Protest Over Worthless Cash

WallStreetJournal  |  Sheyla Urdaneta & Kejal Vyas

Scattered looting as population is stuck with voided 100-bolivar notes

broken-glass

MARACAIBO, Venezuela—Desperate and cashless Venezuelans, angry that the government hasn’t exchanged their voided bank notes as officials had pledged, on Friday rose up in protest with some scattered looting of stores.

National Guard troops were deployed to put down the unrest that broke out as far west as this large city near the Colombian border and in smaller towns in the east. With only nine days to go before Christmas, Venezuelans grappling with a collapsing economy and soaring inflation are left without money after President Nicolás Maduro in a sudden move this week banned the 100-bolivar note, the country’s largest denomination. Only the Central Bank now accepts the remaining bills—and only until Tuesday.

“Maduro is making a mockery of the people, and he has destroyed Christmas for all Venezuelans,” said Desiré Chávez, a 33-year-old clothing vendor in Maracaibo who had accepted the 100-bolivar notes until Thursday. “Now I don’t know what I’ll do because that cash is useless and my kids are hungry.”

Here, the central bank office didn’t open Friday for the exchange officials had been promised. Troops turned away nearly 1,500 people who had lined up starting Thursday night to turn in their useless bills, prompting angry mobs to block traffic and riot. Dozens were arrested.

Mr. Maduro gave his countrymen only days to turn in the 100-bolivar notes, which are worth only a few U.S. cents. Until this week, it was the nation’s most widely used bank note.

“There have and will be difficulties while we overcome this situation,” Mr. Maduro said in a televised speech Friday. He called the measure necessary to combat alleged currency speculators in neighboring Colombia and elsewhere that he blames for his country’s economic troubles. “I appreciate the people of Venezuela’s understanding, awareness, all of its support.”

New 500-bolivar bills that Mr. Maduro had said would circulate this week have yet to be distributed, causing panic, because more than a third of Venezuela’s 30 million people lack a bank account.

Those lucky enough to line up at the central bank headquarters in the capital, Caracas, were able to at least deposit their money. They were given IOUs and told they could pick up the new bills when they are ready.

“I don’t have a bank account, and they need to tell me what I do with this money,” said Ana Garza, a 58-year-old cake vendor from a Caracas slum who had been waiting since 5:30 a.m. in a line that stretched 18 city blocks on Friday. She only had money for a bus ride because no one is accepting the 100-bolivar bills anymore.

“I don’t have words for this measure from Maduro,” griped bus driver Ricardo Salas, 54. “How do you get rid of these bills without the new ones arriving? Buying groceries is going to be horrible.”

On Thursday, the central bank had received at least one shipment of new 500-bolivar bills, according to one person familiar with the matter. But it would take weeks for enough 500-bolivar bills to be available to alleviate the scarcity of cash.

Without money, residents in the southeastern state of Bolivar blocked the only major highway in the region that connects the country to Brazil. Nearly 40 businesses, mostly grocery stores, were ransacked around the state.

“This has gone from a riot over discontent and hunger to vandalism,” said Erick Leiva, head of a local business chamber.

Mr. Maduro this week also temporarily closed the border with neighboring Colombia to crack down on currency speculation along the border, which he blames for the free-falling value of the bolivar. Economists say the government’s feverish printing of money and price controls are the cause.

The desperation was palpable for people like Daniel Morales, 28, a street vendor in Maracaibo.

“I have an 11-day-old baby and I haven’t been able to buy diapers, nor milk,” he said. All of the bills that Mr. Morales had taken to the central bank branch to exchange added up to 20,000 bolivars, or less than $9. A pack of diapers costs more.

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