Venezuela’s Maduro Extends Border Closure, Decreases Window for Swapping Old Currency

Venezuelan President Nicolas Maduro announced Thursday he had extended the closure of its land borders with Colombia and Brazil, and decreased the time window for Venezuelans to deposit old bills at the central bank. Meanwhile the value of the dollar on the black market appears to have plummeted as a result of the initiative. 

By Ryan Mallett-Outtrim
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President Nicolas Maduro says the value of the BsF has been drained by criminal groups hoarding the currency abroad. (Prensa Presidencial)
President Nicolas Maduro says the value of the BsF has been drained by criminal groups hoarding the currency abroad. (Prensa Presidencial)

Puebla, Mexico, December 16, 2016 (venezuelanalysis.com) – Venezuelan President Nicolas Maduro announced Thursday he had extended the closure of its land borders, and decreased the time window for Venezuelans to deposit old bills at the central bank.

Maduro said Venezuela’s borders with Colombia and Brazil will remain closed for another 72 hours, until Sunday. He reiterated the closure isn’t permanent, adding he hoped for “healthy and harmonious relationships across the border”.

“Unfortunately, [the border] is a base for a criminal network that has damaged the Venezuelan economy, [and], which has forced this decision,” he said.

The current border closures began Monday, after the government accused criminal groups of hoarding BsF100 bills in Colombia. The closure coincided with a surprise phase out of the BsF100 note, which will be replaced with a coin. Venezuelans had a 72 hour window from Wednesday to Friday to deposit their notes at private and public banks. Although that window will close on Friday, Venezuelans will still be able to swap BsF100 bills at the central bank for a limited time period next week. 

However on Thursday Maduro also announced he had halved the time period for swaps at the central bank from 10 days to five.

“The president … has decided to modify Decree 2589 … so that from today there will be five days – until December 20 – for the declaration and deposit of Bs[F]100 notes,” read a statement from the president’s office.

Maduro’s government has said the hoarding of BsF100 notes abroad is part of an “economic war” against Venezuela, aimed at wrecking the value of the currency. Venezuela is currently facing its deepest economic crisis in over a decade, with scarcity of consumer goods and spiraling inflation. However, since Maduro announced the currency swap over the weekend, the country’s currency has jumped, and is now trading at a rate of BsF1=US$2480, according to black market tracking website DolarToday. The BsF reached a historic low in late November, when it fell below 4000 to the dollar.