graraps

DISCLAIMER: PLEASE DON'T READ IF YOU ARE LIKELY TO BE DISTURBED BY THE FOLLOWING DESCRIPTION OF A WIDESPREAD THOUGH THEORETICALLY ILLEGAL PRACTICE.

Really, this should be obvious to anyone, but I read some tripadvisor reviews complaining about the pricing of the hotel I'm staying in and thought I'd just remind people here.

Long story short: The Chavez administration is maintaining an "official" exchange rate of 2.15 bolivars per dollar. The real exchange rate is a function of some Venezuelan ADRs in the NYC stockmarket and can be found here, currently standing at 6.90.

Hotels that publish dollar rates do so at the OFFICIAL rate, which means you can either pay in dollars or in bolivares at 2.15 times the dollar amount. Which, in turn, means that my "$270+12% tax" room really costs $94 (incl. tax), which is a pretty reasonable deal for a 5-star with all mod cons.

Now, you need CASH to do it, because using a credit card/making ATM withdrawals will only yield you the official rate. Changing cash isn't much of a problem, though don't expect to get the full rate- I got 5 by a shady lady at the CCS airport (only changing $30 to pay the airport tax, mind!), 5.5 by the owner of the 3-star hotel in MAR I had to initially stay in due to lack of availability in the better properties, and 6 through friends and acquantainces (and I could probably get 6.5 if I wanted to bargain, but it's not worth it, particularly bearing in mind that most of these people are suffering under Chavez!). If you have Euros, it should be possible to change them, too (expect to get around 8-8.5).

The practice of "unofficially" changing dollars or Euros is, of course, illegal, but it is VERY widespread. If you run out of cash during your stay, you may be better off taking a daytrip to AUA and coming back with more greens in your pockets than withdrawing from the ATMs...

WillTravel

Not that I plan to go to Venezuela anytime soon, but does it ever happen that a tourist gets jailed for doing this?

I presume Venezuelans must be buying and selling things from each other in USD or Euros for this to work. How commonly are they caught out and suffer legal consequences?

graraps

First, Venezuela is still very much worth visiting...Alright, I only visit MAR for personal reasons, and I wouldn't be in any kind of hurry to go to CCS, but I'm told the beaches in the state of Falcon are great, as are other parts of the country (Angel Falls, the Andes etc).

I don't have a definite answer for your question about tourists, but, to give you an idea of how common the practice is, on Friday I changed $750 for 4500 bolivars (which is A LOT of banknotes- the largest denomination is 100, and it's not all that common) with the shopkeeper of a shop brimming with people who could obviously see what we were doing and nobody batted an eyelid. I was quite apprehensive about doing this in public, but my friend and the taxi driver both insisted that it's "normal".

In the CCS airport, there are people who will shout at you "cambio" "compro euros al mejor precio" and things like that.

Moreover, I don't profess to know the details of Venezuelan currency exchange laws, but I would be very surprised if anyone (local or foreigner) got jailed for this kind of stuff. My understanding is that they constitute administrative offenses that are punishable by way of fines only.


It's not only that...If they want to travel abroad, they are only officially allowed to buy like $600, and it's nigh on impossible to find anyone prepared to buy bolivares outside of Venezuela. Similarly, small business owners who import stuff are also limited to a certain amount of dollars, and the process is very complex, so they may want to buy some of their merchandise (or at least offer deposits to their vendors) in hard-currency cash.

As explained above, I think it's extremely unlikely for anyone to get caught and fined for this...

alacast

Why don't I bring in $10,000 in USD, trade it for 60,000 bolivars, then trade that for $30,000, then leave?

This is an arbitrage opportunity. What I'm asking is, where are the mechanisms to prevent someone from making a ridiculous profit off of the Venezuelan government?

I'm assuming that I can use the official rate when leaving the country through some official, government currency exchange.

fastflyer

If Venezuela is like the old Eastern bloc wrt currency exchanges, you are not permitted to enter/ leave with the local currency, and all exchanges must be documented. So if you want to change excess local currency back into USD at the end of your visit, you must produce an official receipt of the exchange from USD into local currency (and the amount must be greater at the beginning of the trip compared to the end of the trip).

alacast

I did a little research into this, and evidently there is a legal loophole, using debt/equity swaps, for the Venezuelan financial industry to exchange Bolivars for other currencies without restriction. There are institutions that do this, operating as currency exchanges for companies, and they are the ones that have found the "real" exchange to be 6.5ish. (It used to be lower, but Venezuela has been running up inflation, surprise surprise. Evidently the central bank there is on the verge of being literally out of USD.)

While it would be possible for a foreigner to come in with a big wad of USD (have to evade customs), fastflyer is correct that there's no mechanism to trade the bolivars back at the 2.15 rate. Your only route is to use the debt/equity institutions, which would put you right back at the "black market" exchange rate you used on the street.

What confuses me is how an airline then prices their products in Venezuela. I'm assuming here that an international company operating in Venezuela would want to pull their profits back to their native currency, so they can pay stockholders, etc. If you sell an airline ticket online in USD, you don't need to care. But if you're paid in bolivars at the airport (I take it this is frequently done in Venezuela? Or at least Graraps thinks it's done easily.), you need to exchange that currency. You have a mechanism to do that: the exchange companies.

When a company converts an advertised USD price to a bolivar price to a physically present customer, are they legally required to use a 2.15 conversion rate? If not, I would expect a company being paid bolivars in cash to price their goods much higher in bolivars. This would negate most, though probably not all, of the exchange benefit to the consumer.

So someone help me out with this situation.

graraps

To the best of my knowledge, there are no restrictions on moving bolivars from/to Venezuela. I didn't even get asked at exiting the country...Moreover, the CCS duty free shops ONLY accept bolivars, so it would be bizarre if they did so with a serious restriction in place.

There are limits to the amount of dollars you can move to/from the country, but enforcement is very lax...My customs entry card wasn't even read by the officials on entry and, on exit, the woman behind me going to Peru got caught carrying $9000 in cash in her handbag and without any documentation showing how she obtained it and was let go on her merry way after a couple of minutes of questioning (judging from what I've read about the likes of the TSA, it would appear that, if she was flying from the US with that kind of money on her, she would go directly jail without passing "go" ).

Having said all that, I would in any event advise complying with the laws/limits in effect when it comes to entering and exiting the country.

AFAIK, this is correct. Therefore you just have to make sure that you don't have a lot of excess bolivars....

graraps

No. The exchange mechanism is the Venezuelan government entity CADIVI. If you have a few hours (days?) to spare, you can check out their website here.

You can even find the penalties for currency-related offenses here. Per article 9, you get a fine that's double the amount of the operation...now that's some deterrent!

Absolutely. ^
Just look at the prices of any foreign-owned hotel in Venezuela...There's no way you'd pay $380 for a standard room in the "Gran" Melia Caracas next to the buhoneros in Sabana Grande, but, given the relative lack of decent alternatives, it may indeed be worth 817 bolivares, which is the equivalent of $118...

alacast

Here are some links that describe the overall economic situation, to give some additional clarity:

http://wikitravel.org/en/Venezuela#Money
http://www.bulletproofretirement.com/public/80.cfm
http://www.bulletproofretirement.com/public/47.cfm
http://www.gkcaracas.um.dk/da/menu/E...orhold/CADIVI/

Sorry the 2nd and 3rd sites look schmucky, but they really do know their stuff.

I take it, then, that flights in and out of Caracas are notably more expensive than one would expect from, say, Bogota,, though not at the full 3x the exchange rate difference would indicate, since there's arbitrage opportunities for established companies. So if you paid "face" price in USD, you're losing out, but if you paid "parallel market" price, you'd be getting a discount. Is this the case?

graraps

No. At least in my experience, they are comparable. For example, UX I-class (discounted business) MAD-CCS-MAD is 2456 Euros. CCS-MAD-CCS it's 2226!!

Cheapest IB business class on MAD-BOG-MAD is 3019 and BOG-MAD-BOG 2595. So, in this example the CCS flights are actually substantially CHEAPER before you take the exchange rate into account (though it's worth noting that there are 3 airlines on the MAD-CCS route versus 2 on MAD-BOG)...but generally I'd say they're in the same ballpark.

If you take the time and read the stuff posted on the CADIVI website, you will probably be able to find out exactly how it works out for airlines. Besides, I wouldn't be surprised if jet fuel was heavily subsidised by the state (just like petrol is).

Gaucho100K

Wirelessly posted (Nokia N97 / Palm TX: Mozilla/5.0 (SymbianOS/9.4; Series60/5.0 NokiaN97-3/10.2.012; Profile/MIDP-2.1 Configuration/CLDC-1.1; en-us) AppleWebKit/525 (KHTML, like Gecko) WicKed/7.1.12344)

Too bad Chavez probably has a special ForEx restriction in place... Else RTW's from Caracas could be interesting..

graraps

What restriction? I am currently looking into my next RTW...

AdamSouthFL

This is true. Years ago I tried to make a profit in exchanging dollars. I had changed $1000 USD to Bolivares for a 1 day connection in CCS. Took the Bolivares to Colombia and tried to change them to COP. However the next day I had realized that my exchange to COP was equal to $1000 USD. I found out that my Bolivares were exchanged at the same Black market rate that I changed my dollars. I didn't lose money.

Lesson learned, changing dollars for Bolivares to use IN VEN proves profitable.

ozstamps

Great info graraps

We are planning to visit Venezuela in the next week or two, flying in from EZE.

I've been on vacation to way over 100 countries and have seen these sort of things many times.

However we are in a bind, as I want to book in ADVANCE a 5 or 6 day plan to save hassles. A few days in Canaima, and a few in Las Rochas, and sadly I'll get screwed up front at real exchange rate. (Unless I can pay them in cash on arrival with Bols I get myself?)

Short of knowing a travel agent there I can't see a way around that.

I am pretty street savvy so will be looking to swap a few $US100 or so at the airport or somewhere that appears fairly safe.

So 5 to 1 should be pretty easily doable with no real contacts? What always worries me when arriving is getting old out of date currency that gets palmed off on tourists!

I carry around a few of these babies in my wallet I got earlier this year .. now THAT is a currency with issues!

nwa330

I love this black market game. When I travel to Maracaibo I have my friend buy my airline ticket from the AA counter and save 60-75% off my ticket. When I arrive I pay him back my exchange my dollars on the black market. Last timed I traveled a was getting 7.0 to the dollar. much better then the official 2.15 rate.

There is no way to bring back the currency to the USA and exchange it into dollars. Venezuelan currency is not traded on the open market. TRUST ME!