Question

The country which demonetised its currency after India but immediately backtracked was
1. Colombia
2. Venzuela
3. Brazil
4. Chile

Answer 1

Correct Answer - Option 2 : Venzuela

The correct answer is Venezuela.

• The country which demonetized its currency after India but immediately backtracked was Venezuela.
  • The Government of Venezuela demonetized the 100 bolívares notes on December 11, 2016.
  • Venezuela whose inflation rate is estimated to touch 475% in 2016, announced that it has demonetized its most valuable note, the 100-bolivar bill.
  • The Nicolas Maduro-led government gave citizens a 72-hour window before withdrawing the currency, which accounted for 77% of the nation's cash in circulation.

• On November 8, 2016 PM Narendra Modi declared that from the stroke of midnight 500 and 1000 rupee notes would cease to be legal tender.
• This immediately sparked unrest and an estimated 15 tonnes of gold worth Rs 5,000 crores was purchased within an hour of the announcement.
• The situation only deteriorated thereafter. Since the Indian economy is highly dependent on cash, the move had affected consumption and trade (evident from a record low 3.63% retail inflation rate for November 2016) 

• India has demonetized currency details are:
  • India demonetized its currency in 1978.  The then Janata party coalition in order to counter black money in the economy decided to scrap Rs 10,000, Rs 1,000, and Rs 500 currency notes.
  • On November 8, 2016 PM Narendra Modi declared that from the stroke of midnight 500 and 1000 rupee notes would cease to be legal tender.