Double Exchange Rates

Venezuela is the first country that I have been to which has two exchange rates for the dollar: the legal and black market also called legal parallel market. When I arrived it took me some time to understand what is happening here. But it seems that it is still difficult to understand why this is so.

For people who are coming to Venezuela, make sure you come with dollars in your hand. When you come with dollars, you will exchange them in the black market price. When I say black market price, it is not something that you should fear. Even the people who work in the bank they would advise you to change your money in the black market. The black market is simply people, Venezuelans, who want to buy your dollar at double the price because there is no free access to dollar since the government has restricted it.

Unlike other countries where one can buy dollar in a Bureau de Change, in Venezuela there is nothing like that. The only institution which gives dollar is government regulated and it is called Cadivi (Comisión de Administración de Divisas). One needs to apply to get dollars at the legal exchange rate of 1 dollar for about 4.6 Bolivares Fuertes. In a year someone will only be given a maximum of US$2,500 according to recent figures. And in case one wants to buy something through internet, the government will allow US$500 in a year. This means the Government cannot give you more than that. There are exceptions in case one is studying abroad in United States for example. In this case, one might be lucky to receive more than that from the Government. But the process is lengthy and many people don’t like to go through it.

Then if you don’t want to go through it you will need to buy dollars in the black market. The exchange rate is double the price and according to recent figures, 1 dollar is exchanged at 9.2 Bolivares Fuertes. Now the problem of getting dollars arises. You might have Bolivares Fuertes but still you might not be able to get the amount of dollars you need. You need to ask friends, and if you have foreign friends you might try to inquire from them if they have some dollars with them. The process can be a difficult one.

So for many Venezuelans it is not easy to travel since getting dollars will cost them twice and even so, it is not easy to get dollars. There issues of fake dollars too, especially from Colombia. One needs to be careful.

When you come to Venezuela, you would be swum at the airport with people wanting to buy your dollars. Everyone wants to buy your dollars.

Don’t ever come with your dollar in a bank account. When you withdraw, the banks will convert them at the legal exchange rate of 4.6. So it is better to sell them in the black market for the price of 9.2.