Venezuela's new 100,000 Bolivar bill is worth $2

Venezuela announced plans to begin issuing 100,000-bolivar notes on Wednesday as the government struggles to control skyrocketing inflation. One year ago, the largest bill was only 100 bolivars – an amount that is now practically worthless.

President Nicolas Maduro unveiled the note at a cabinet meeting. It will be worth about €2 euros or $2.3 on black market exchanges.

Caracas said the new bill is only a stop-gap measure amidst a more comprehensive financial overhaul, one facet of which is to eventually rid the country of paper money entirely.

"The use of the physical currency is being replaced," the president said.

Maduro also announced a 30 percent increase in the country's minimum wage and a rise in pension payouts for retired workers, though economists have warned this will only exacerbate inflation.

He also took the opportunity to threaten any opposition politicians who boycott nationwide mayoral elections in December.

Read more: Venezuela opposition MUD fractures after Constituent Assembly loyalty oaths

Five years in crisis

The oil-rich country has been wracked by a deepening financial crisis since 2012, when falling oil prices combined with the ruling Socialists United of Venezuela party's economic policies created a massive shortage of food and basic necessities.

At the beginning of 2017, the government began issuing new 500, 5,000 and 20,000 bolivar notes after a year in which consumer prices rose 800 percent. Residents in Caracas must line up for hours in front of cash machines to withdraw miniscule amounts.

Frustration over the crisis led to months of massive anti-Maduro protests that killed at least 163 people and injured more than 15,000 in clashes with police.

es/aw (AP, Reuters)