Barter Is the New Currency in Collapsing Venezuela

From Reuters, Fish for flour? Barter is the new currency in collapsing Venezuela describing how hyperinflation and failing banking infrastructure is being replaced by barter even in the capital.

Under the midday sun, dozens of fishermen wait to sell their day’s catch by a lagoon in the town of Rio Chico on the Caribbean coast of Venezuela. But they aren’t expecting cash in return.

Instead, they’re swapping mullets and snappers for packages of flour, rice and cooking oil.

“There is no cash here, only barter,” said Mileidy Lovera, 30, walking along the shore with a cooler of fish that her husband had caught. She hoped to exchange it for food to feed her four children, or medicine to treat her son’s epilepsy.

In the hyperinflationary South American country, where bank notes are as difficult to find as chronically scarce food and medicine, Venezuelans are increasingly relying on to barter for basic transactions.

Payment for even the cheapest of goods and services would require unwieldy piles of banknotes, and there simply are not enough of those in circulation…

Even in the capital Caracas, some 130 km (81 miles) to the west, many informal merchants lack access to bank services or point of sale terminals and prefer to be paid in kind.

The rise of barter exchange, amid hyperinflation and a dearth of cash, is a reflection of how the once-prosperous country is reverting to the most rudimentary of mechanisms of commercial exchange.

“It’s a very primitive payment system but it’s also very primitive for a country not to have enough cash available,” said economist Luis Vicente Leon of consultancy Datanalisis…