Venezuelans rush to shop, fill tanks before monetary overhaul

CARACAS/MARACAIBO (Reuters) - Jittery Venezuelans on Friday rushed to shops and lined up at gas stations on concerns that a monetary overhaul to lop off five zeros from prices in response to hyperinflation could wreak financial havoc and make basic commerce impossible.

Shoppers sought to ensure their homes were fully stocked with essentials such as food and dry goods and their tanks full before the measure decreed by President Nicolas Maduro takes effect on Monday.

Inflation hit 82,700 percent in July, according to the opposition-run congress, as the country's socialist economic model continued to unravel, meaning purchases of basic items such as a bar of soap or a kilo of tomatoes require piles of cash that is often difficult to obtain.

"I came to buy vegetables, but I'm leaving because I'm not going to wait in this line," said Alicia Ramirez, 38, a business administrator, leaving a supermarket in the western city of Maracaibo. "People are going crazy."

13 PHOTOS
Venezuelans rush to shops before monetary overhaul
See Gallery
Venezuelans rush to shops before monetary overhaul
A 2.4 kg chicken is pictured next to 14,600,000 bolivars, its price and the equivalent of 2.22 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES. TPX IMAGES OF THE DAY
A kilogram of tomatoes is pictured next to 5,000,000 bolivars, its price and the equivalent of 0.76 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A container of 500gr of margarine is pictured next to 3,000,000 bolivars, its price and the equivalent of 0.46 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A package of pads is pictured next to 3,500,000 bolivars, its price and the equivalent of 0.53 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A toilet paper roll is pictured next to 2,600,000 bolivars, its price and the equivalent of 0.40 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A kilogram of carrots is pictured next to 3,000,000 bolivars, its price and the equivalent of 0.46 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A package of 1kg of corn flour is pictured next to 2,500,000 bolivars, its price and the equivalent of 0.38 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A package of 1kg of rice is pictured next to 2,500,000 bolivars, its price and the equivalent of 0.38 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A kilogram of meat is pictured next to 9,500,000 bolivars, its price and the equivalent of 1.45 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A package of diapers is pictured next to 8,000,000 bolivars, its price and the equivalent of 1.22 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A kilogram of cheese is pictured next to 7,500,000 bolivars, its price and the equivalent of 1.14 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A package of 1kg of pasta is pictured next to 2,500,000 bolivars, its price and the equivalent of 0.38 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
A bar of soap is pictured next to 3,500,000 bolivars, its price and the equivalent of 0.53 USD, at a mini-market in Caracas, Venezuela August 16, 2018. It was the going price at an informal market in the low-income neighborhood of Catia. REUTERS/Carlos Garcia Rawlins SEARCH "GARCIA ECONOMY" FOR THIS STORY. SEARCH "WIDER IMAGE" FOR ALL STORIES.
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

The change appears unlikely to generate the chaos of December 2016 when Maduro removed the largest note in circulation without providing a replacement for it. That led to protests, lootings and hundreds of arrests as the country was effectively left without legal tender.

Drivers also rushed to fill up on Venezuela's heavily-subsidized gas, the world's cheapest at around 2,896 gallons per U.S. penny. Some drivers were worried about paying for gas come Monday as there will be no new legal tender small enough to pay for a full tank.

Maduro also said this month that gas price should be increased, but has not provided a timeframe for the price hike. A half-dozen sources at service stations said they had not been briefed about any changes and were not expecting an imminent rise in prices.

"It's better to be safe than to try to go out during the weekend and not to find open gas stations... I think people are more sad than angry about this," said teacher Ana Perez, 50, as she lined up in a station in the once industry-filled city of Valencia.

Maduro, who has said the country is victim of an "economic war" led by political adversaries, said the new monetary measure would bring economic stability to the struggling OPEC nation.

But his critics have said the move is little more than an accounting manoeuvre that would do nothing to slow soaring prices. They blame inflation on failed socialist policies and indiscriminate money printing.

13 PHOTOS
Venezuela's President Nicolas Maduro
See Gallery
Venezuela's President Nicolas Maduro
Venezuela's President Nicolas Maduro speaks during a meeting with ministers at the Miraflores Palace in Caracas, Venezuela August 13, 2018. Miraflores Palace/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY.
Venezuela's President Nicolas Maduro speaks during a meeting with government officials at the Miraflores Palace in Caracas, Venezuela August 7, 2018. Miraflores Palace/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY
Venezuela's President Nicolas Maduro speaks during a meeting with government officials at the Miraflores Palace in Caracas, Venezuela August 7, 2018. Miraflores Palace/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY
Venezuela's President Nicolas Maduro speaks with a National Guard cadet who was injured by a drone attack, at the Miraflores Palace in Caracas, Venezuela August 7, 2018. Miraflores Palace/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY
Venezuela's President Nicolas Maduro speaks during a meeting with military high command members in Caracas, Venezuela August 11, 2018. Miraflores Palace/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY.
Venezuela's President Nicolas Maduro speaks during a campaign rally in La Guaira, Venezuela May 2, 2018. REUTERS/Carlos Garcia Rawlins TPX IMAGES OF THE DAY
Venezuela's President Nicolas Maduro greets supporters during his closing campaign rally in Caracas, Venezuela May 17, 2018. REUTERS/Carlos Jasso TPX IMAGES OF THE DAY
Venezuela's President Nicolas Maduro (C) poses for a selfie next to his wife Cilia Flores (centre R) during an event with supporters at Plaza Bolivar square in downtown Caracas, Venezuela February 1, 2018. Miraflores Palace/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY TPX IMAGES OF THE DAY
Venezuela's President Nicolas Maduro speaks during a meeting with the ministers responsible for the economic sector at Miraflores Palace in Caracas, Venezuela March 22, 2018. REUTERS/Marco Bello TPX IMAGES OF THE DAY
Venezuela's President Nicolas Maduro throws the ball during a softball game with ministers and military high command members at Fuerte Tiuna military base, in Caracas, Venezuela January 28, 2018. REUTERS/Marco Bello TPX IMAGES OF THE DAY
Venezuelan President Nicolas Maduro show his ballot as casts his vote at a polling station during the Constituent Assembly election in Caracas, Venezuela July 30, 2017. Miraflores Palace/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY. TPX IMAGES OF THE DAY
SANTIAGO DE CUBA, CUBA - DECEMBER 03: Cuban President Raul Castro speaks with Venezuela's President Nicolas Maduro during a memorial tribute for his brother former President of Cuba Fidel Castro at the Antonio Maceo Revoloution Square before his burial tomorow on December 3, 2016 in Santiago de Cuba, Cuba. Mr. Castro died on November 25th at the age of 90 and the country is in the midst of a 9 day mourning period that lasts until his funeral on Sunday in Santiago de Cuba at the Cementerio�anta Ifigenia. (Photo by Joe Raedle/Getty Images)
Venezuelan President Nicolas Maduro waves to the crowd during a motorcade after his installation in Caracas on April 19, 2013. AFP PHOTO/Luis Acosta / AFP PHOTO / LUIS ACOSTA (Photo credit should read LUIS ACOSTA/AFP/Getty Images)
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

Because many transactions now happen via debit cards over point-of-sale terminals, many worry that the change - which banking industry leaders have said was carried out too quickly - could collapse financial networks.

Maduro has declared a public holiday for Monday, when a new set of bills will be introduced with the lower denominations. Internet banking operations will be halted for several hours starting on Sunday evening.

But the primary difference between the upcoming change and Maduro's 2016 currency decision is that in this instance, most of the current ones will coexist with the new notes for an undetermined period while the new bills come into circulation.

That will in some circumstances leave consumers in the confusing situation of having to use old bills with face value of 1,000,000 bolivars to make purchases valued at 10 bolivars in the new denomination.

Poor Venezuelans without bank accounts have for months been carrying wads of cash to make basic purchases.

Buying one kilo of cheese, worth the equivalent of $1.14 at the most widely used exchange rate, requires 7,500 notes of 1,000 bolivar denomination - a note that was only brought fully into circulation in 2017.

One bar of soap, which sells for the equivalent of $0.53, requires 3,500 of the same notes.

"This is going to be complete disaster, we don't have information," said Yoleima Manrique, 42, assistant manager of a home appliance store in Caracas. "It's going to be crazy for the clients and for us."

(Additional reporting by Marianna Parraga in Mexico City, Mayela Armas, Deisy Buitrago and Corina Pons in Caracas, Anggy Polanco in San Cristobal, Maria Ramirez in Puerto Ordaz, and Tibisay Romero in Valencia; Writing by Brian Ellsworth; Editing by Alexandra Ulmer and Diane Craft)

Read Full Story