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Venezuela Shuts Colombia Border to Fight Currency Smuggling

by Associated Press

   CARACAS, VENEZUELA --

   President Nicolas Maduro on Monday ordered the closure of Venezuela's
   border with Colombia for 72 hours in a crackdown on what he says are
   "mafias'' smuggling hard-to-find cash that is destabilizing the
   socialist economy.
   The move comes as Maduro is trying to get a grip on Venezuela's
   galloping inflation, which has choked business and made bolivar notes
   among the hardest items to find in the already shortage-plagued
   oil-based economy.
   "This is an attack against Venezuela, so this is a necessary,
   unavoidable measure,'' Maduro said in announcing the border closure in
   a televised address alongside top economic aides. "It's the first of a
   series of decisions that we're going to be taking to defend our
   bolivar, our economy and our people.''
   The border shutdown coincides with Maduro's decision to withdraw from
   circulation the 100-bolivar note, which is currently the country's
   largest-denominated bill but worth only about 3 U.S. cents at the
   widely used black market rate. The government says it will start
   replacing the 100-bolivar note with larger bills.

   People line up to withdraw cash from an automated teller machine
   outside a Banco Provincial branch in Caracas, Venezuela, Dec. 12, 2016.

   Venezuelans on Monday rushed to spend their 100-bolivar notes before a
   Wednesday deadline for the bill to be taken out of circulation. An
   estimated one-third of Venezuelans have no bank account and keep their
   savings in the soon-to-be-worthless bills.
   In the coming days, the country is expected to roll out six
   larger-denominated bills reaching as high as 20,000 bolivars. Many
   economists say the larger bills will fuel only faster inflation, which
   is already the highest in the world and forecast by the International
   Monetary Fund to soar past 1,000 percent in 2017.
   Maduro has long accused criminal gangs operating along the border of
   trying to smuggle everything from truckloads of subsidized food to
   gasoline sold in Venezuela at the world's cheapest prices.
   He compared the trade in cash to something like a centrifuge by which
   "mafias'' operating from the Colombian border city of Cucuta buy scarce
   bolivars with hard currency and then recycle them back into Venezuela
   for a huge profit, driving down the currency's value in the process. He
   said that earlier Monday 64 million bolivars in cash had been seized
   coming across the border on dirt trails that proliferate along the
   1,378-mile (2,219-kilometer) border.
   There was no immediate comment by Colombia's government. President Juan
   Manuel Santos and his top aides are visiting several European capitals
   after the Colombian leader over the weekend received the Nobel Peace
   Prize in Oslo.
   The border between the two countries was closed for a year in a
   Venezuelan effort to combat smuggling. It was reopened in August to
   allow the few Venezuelans who can still afford it to cross into
   Colombia to buy badly needed food and medicine.
   In closing the border again, Maduro tried to sound conciliatory to
   Santos, saying the two had discussed the issue previously. He also
   seemed to acknowledge the seriousness of Venezuela's cash crunch by
   announcing a series of measures to stimulate electronic-based
   transactions.