Crystallex International

Venezuela's Central Bank chief Nelson Merentes was fired on January 22, 2016, amid a deep economic crisis aggravated a botched attempt to replace the country's largest bank note (AFP Photo/FEDERICO PARRA)

Caracas (AFP) - Venezuelan President Nicolas Maduro on Sunday named a lawmaker as the country's new central bank chief, after reportedly pushing out the former head as the country struggles through a deep economic crisis.

Speaking on his weekly television program, Maduro announced he was nominating Ricardo Sanguino to take over from Nelson Merentes, who had handed in his resignation.

"I would like to thank Nelson Merentes for all the effort he has made at various battlefronts, but I want us to initiate a new stage in the development of the Central Bank of Venezuela," the left-wing leader declared.

Merentes had been under intense pressure after the central bank bungled the recent release of bigger denomination banknotes.

According to local press, Maduro himself had asked Merentes to resign.

He said he has great confidence in Sanguino, 73, a longtime political player who has headed the budget committee in Venezuela's National Assembly among other key posts.

Maduro did not directly mention the currency crisis, but speculation has been rife in recent days that the botched notes release could be the final straw, costing Merentes his job.

Venezuela is considered to have the highest inflation rate in the world, making its smaller banknotes virtually worthless.

The 100-bolivar note had been the highest denomination until recently, but was worth only a few US cents.

Caracas released new, bigger denomination banknotes last week to aid citizens struggling with unwieldy wads of cash to pay for everyday purchases.

The notes were meant to be released in December but got delayed, causing chaos as Venezuelans queued up anxiously to change their bills.

- 'Catastrophic' -

Automatic cash machines, in another snafu, were not yet dispensing the new money because they had not been programmed to handle the bigger notes.

Inflation in Venezuela is projected to soar to a mind-boggling 1,660 percent this year, according to the International Monetary Fund.

The socialist president has admitted that the situation is "catastrophic," and ruled all of 2016 under an emergency economic decree -- renewed last week -- that grants him discretion to manage state resources.

It also removed the legislature's power to approve the appointment of central bank directors as well as the national budget.

At the same time, it gave the central bank authority to grant or finance loans to the state and to public or private entities when the president considers that an emergency situation exists.

Maduro said signing the decree was necessary after a Venezuelan investigation found that billions of bolivars, in bills of 100, were stashed away by international mafias, mainly in Colombian cities but also in Brazil.

Asked to explain his views on the role of the central bank, Sanguino said Sunday that they "were the creation of the global capitalist system, which were created with a concept of autonomy that is even above the role of the head of state."

Like Maduro, Sanguino has blamed Venezuela's crisis on an economic war waged by right-wing businessmen, and stressed that the central bank must be at the service of the people.