By Anatoly Kurmanaev and Kejal Vyas
CARACAS, Venezuela -- Venezuela's Socialist government, a vocal critic of the dollar's global dominance, has hired the exclusive supplier of U.S. currency paper to provide the bulk of its new bank notes.
Earlier this month, Venezuela's central bank awarded Boston-based securities printer Crane Currency the largest part of a contract for new bill denominations needed to keep up with triple-digit inflation, according to people involved in contract negotiations.
"Given their antipathy towards the U.S., I'm surprised that they would even let a U.S. firm participate," said Owen Linzmayer, a San Francisco-based banknote expert who catalogs world currencies.
The central bank and Crane, which has provided the U.S. Treasury with blank currency paper since the 1879, declined to comment.
As inflation soars, the bills in circulation across Venezuela are nearly worthless, turning the most basic transactions into logistical nightmares and saddling local banks with crippling money-handling costs. ATMs run out of cash in just a few hours and coins have little to no use in a country afflicted by a deep economic contraction and rising political turmoil.
Struggling with runaway inflation, Venezuela's central bank chose several companies, including Crane and U.K.-based De La Rue. The firms will deliver new notes going up to 20,000 bolivars in December. At present, the biggest note in use is the 100-bolivar bill, which is worth eight cents on the black market.
Crane will produce Venezuela's new 500 and 1,000 bolivar notes. Crane's 500 bolivar note will have the same security features as the new $100 bill, despite being worth just 35 cents on the black market.
Printing the 500 bill will cost almost half of its current value, according to currency experts. Central bank officials say the 500 bolivar note may be replaced by a coin in the future.
Write to Anatoly Kurmanaev at Anatoly.email@example.com and Kejal Vyas at firstname.lastname@example.org
(END) Dow Jones Newswires
October 31, 2016 15:37 ET (19:37 GMT)
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