Amid an acute national shortage of banknotes, the town of Elorza in western Venezuela has started issuing its own paper currency.
Local officials said that the currency would make it easier for residents and visitors to trade during the town’s festivities, which start on Monday.
They said rampant hyperinflation and a scarcity of bolivares, the national currency, had affected trade in Elorza.The new currency can be bought at the mayor’s office via bank transfer.
The paper bills feature the face of independence hero José Andrés Elorza and, like the town, are named after him. “People don’t have bolivares to spend, that’s why we have created bills of two denominations… and we’ve already sold 2bn bolivares worth,” mayor Solfreddy Solórzano, from the governing PSUV party, said.
Local businessman Canuto García explained that the town came up with the idea after it noticed that at local festivities in nearby cities “money did not flow”.
“Now those who want to buy just a sweet or even a whole cow from the barbecue, will be able to do so,” the cattle breeder said.
Venezuela has the highest rate of inflation in the world. In the year to the end of February 2018, prices in Venezuela rose by more than 6,000%, according to an estimate by the opposition-dominated National Assembly.
Venezuelans have been set limits to the cash they pay out per person per day to 10,000 bolivares, which equates to less than five US cents on the black market. On the black market, the 2bn bolivares worth of Elorzas sold by the local authorities are equivalent to just under $9,000.
Residents and visitors wanting to buy Elorzas can do so via bank transfer or debit card payment at the mayor’s office, circumventing the need to carry wads of bolivares.
The local authorities charge 8 percent commission but say they will offer a refund for any unspent Elorzas. Traders can take their Elorzas to the mayor’s office at the end of the day and have the equivalent in bolivares transferred into their accounts.
Elorza is not the first town in Venezuela to come up with the idea of printing its own money. In December, the community of El Panal in Caracas launched paper notes called panales which could be exchanged for the rice which the community grows.
Critics of the government of President Nicolás Maduro blame Venezuela’s rampant hyperinflation on currency controls brought in by the late President Hugo Chávez 15 years ago.
The government says an economic war waged by “imperialist” nations against Venezuela and hostile business people within the South American country are to blame as well as the smuggling of the currency to neighbouring Colombia.