Venezuelans living with hyper-inflation and a scarcity of cash for buying daily goods will soon have the country's largest paper bill circulating in recent history.

The country's president announced on Wednesday that the new 100,000-bolivar note will hit the streets this week. It will be worth less than $2.50 in US currency in black market dealings.

In a nationally broadcast appearance, President Nicolas Maduro held up the new paper bill, while also unveiling a 30 per cent boost to the minimum wage.

The new denomination is stop-gap measure in an economic plan by Maduro's government aimed at doing away with the need for paper money.

“The use of the physical currency is being replaced,” the socialist leader said.

Economists warn that measures such as those Maduro announced on Wednesday are likely to drive up inflation rather than bring relief to the oil-rich country wracked by economic problems and deep social tensions.

Residents in the capital of Caracas line up for hours to withdraw small amounts of paper money from bank machines. Food shortages also spawn long lines along sidewalks outside markets.

At the beginning of 2017, new notes of 500, 5,000 and 20,000 bolivars entered the market, but these have not been enough to meet demand. The 20,000-note has a value of roughly 50 US cents.

Maduro announced a rise in pensions that retirees collect. An increase in the minimum wage for workers means they will take home the equivalent of $132 a month at the strongest of two official exchange rates or $11 at the widely used black market rate.

Henrique Capriles, a leader in Venezuela's opposition movement, derided Maduro's economic measures. He said on Twitter: “With inflation the highest on the planet, the official salary announcement is a mockery of the Venezuelan workers!”

Maduro also threatened punishment for opposition parties that do not participate in December elections of mayors.

Two of Venezuela's leading opposition parties have said they will boycott the mayoral elections to protest what they called rigged gubernatorial elections held in October.

Maduro asked key government bodies to take “draconian measures” against parties that abstain from the mayoral races, such as disqualifying them from taking part in future elections.