Riots break out in Venezuela as people get stuck with worthless cash

Venezuelans rioted outside banks and stores on Friday as the nation’s struggling government pulled the country’s largest bill from circulation.

One of the most dramatic incidents happened in El Callao, near Venezuela’s gold mining belt, where employees of a Chinese-owned supermarket frantically threw piles of cash out of the second floor window of their business as an angry mob approached. The desperate act was apparently a last ditch effort to dissuade people from breaking in and looting the store.

#SAQUEOS #ELCALLAO Asi lanzan billetes de 50bs de las oficinas de una abasto chino. todos los abastos de El Callao fueron saqueados hoy pic.twitter.com/cJe1ooziNp

— EL CALLAO EN LINEA (@elcallaoenlinea) December 16, 2016

Another photo taken in the same town shows a mob ransacking another Chinese-run market.

Carlos Chancellor, the mayor of the neighboring town of Tumeremo, reported protesters burning trash in the streets.

He called on the Venezuelan government to extend the deadline for people to turn in their 100 bolivar notes, which were pulled from circulation on Thursday. He said many people in his town still have their 100 notes because they weren’t given enough time to deposit or exchange the bills.

“Most people here work in the mining sector, so they deal mostly in cash,” Chancellor wrote on Facebook.

Venezuela’s government announced the removal of the 100 bolivar bills last Sunday in an effort to stop “foreign mafias” from buying the money in bulk and taking it outside the country to allegedly starve and “destabilize” the economy.

Most people don’t buy the government’s story. Some economists have said that the withdrawal of the bills is instead a desperate plan to stop Venezuela’s currency from losing its value against the dollar, by drastically decreasing the supply of bolivares on the market.  After announcing the withdrawal of the 100 bolivar bill, Venezuela also closed its border with Colombia on Tuesday, delivering a huge blow to money traders and stores in Colombia that sold goods to Venezuelans.

“Last week-end we were trading one bolivar for one peso” said John Ospina a money trader in the Colombian border town of Cucuta. “Now 100,000 pesos only buys you 33,000 bolivares, because Venezuelan currency is very scarce.”

Whatever the reasoning behind the odd policy move, frustration with the government has grown throughout the week as Venezuelans formed long lines outside banks to deposit the “100” bills. On Friday, banks stopped accepting the bills, igniting social unrest.

In the town of San Felix in Eastern Venezuela, hundreds of people protested outside a local branch of a Venezuelan state-run bank that would no longer take 100 bolivar bills.

In Guasdalito, a town in Apure sate, people looted another state run bank that would not deposit or trade their 100 bolivar bills.

In San Cristobal, near the border with Colombia, looting broke out as people stuck with wads of worthless cash decided to help themselves to clothes and food. Riot police were deployed to quell the unrest.

“I can see the police going towards downtown and they are heavily armed,” said Maria Isabel Castro, an accountant from San Cristobal. Castro said that debit card payment machines were also failing in stores in her city Friday.

“We have no cash and it’s also hard to pay for things electronically,” she said. “The situation is very tense.”

Manuel Rueda is a correspondent for Fusion, covering Mexico and South America. He travels from donkey festivals, to salsa clubs to steamy places with cartel activity.