Inflation So High in Venezuela, Cash No Longer Fits in Regular Wallets

wallets-1293507_960_720In the U.S., paper makes up about 35% of all landfill waste. However, Venezuela’s paper problem has gotten totally out of control as inflation continues to skyrocket. In fact, in Venezuela, going to an ATM and taking out the equivalent of just five U.S. dollars produces a fistful of 100 bills or more. That’s a lot of paper with very little value.

Experts say that inflation is projected to reach about 720% this year in Venezuela due to the collapse of the nation’s oil-based economy. The government frantically prints more cash as prices soar, leaving Venezuelans with so many valueless bills that can barely fit inside a standard wallet. People have resorted to stuffing wads of cash in handbags and backpacks just to go out and make a small purchase.

ATMs must be restocked every three hours or so because the machines can only hold so many paper notes. As a result, there are only a limited number of working ATMs at any given time, causing long lines to form as people wait to make a withdrawal.

All of these hassles over cash have led mean Venezuelans to rely heavily on credit cards. In fact, the owner of a café told the Washington Post that 90% of his transactions were conducted electronically.

Right now, about 70% of Americans have at least one credit card, with the national average being 3.5. However, electronic payment wasn’t as common in Venezuela until recently. Unfortunately, it can be expensive for smaller businesses to purchase and use credit card machines.

President Nicolas Maduro blames the country’s poor financial situation on the “economic war” started by his business opponents and the United States. As a temporary solution, he plans to issue bills in larger denominations this coming January.

“They’re necessary for the economy, for the banks and for the people,” said the former executive technical director of the Venezuela Bank Association, Jose Grasso Vecchio. “The move is a positive one.”

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