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De La Rue Face Major Losses as Inflation in Venezuela Skyrockets

10 Jun 2019  Mon

The biggest banknote printer in the world, De La Rue is staring at major losses as the company profits reduced by 78 per cent last year. There are many reasons for this downfall. The company lost a contract to a French company to print British passports, worth £490 million. Moreover, the chief executive officer had resigned.

De La Rue had to bear a loss of £18 million from the Central Bank of Venezuela as well. The bank was not in a position to pay for printing its bank notes. De La Rue had made a profit of £113.6 million last year but has only managed to make a profit of £25.5 million this year.

Venezuela’s inflation rate spiralled to 130,060 per cent in 2018 and its GDP fell by 22.5 per cent. The country has the largest oil reserves in the world but oil exports have also diminished drastically.

The notes printed by De La Rue are absolutely worthless in Venezuela. Citizens are even folding the notes into souvenirs and using them as money. Apart from that, Venezuela cannot transfer any money due to the sanctions imposed by the United States. Officials of De La Rue believe that customers want to pay that debt.

Experts also predict that the company could be taken over by other banknote manufacturers like Crane Currency. Crane Currency had already tried to take over De La Rue in 2010 but was unable to do so back then.

Image Courtesy: The Central Bank of Venezuela

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