April 2, 2007

Black Market Dollars
Ciudad Bolívar, Venezuela

A new country, a new currency, and a new travel twist.

El Presidente Hugo Chavez, with his great insight and wisdom, has decided that Venezuela's currency is going to be a strong one, and has officially pegged it at a rate that currently exchanging at about $2,150 bolivars for each U.S. dollar. Unfortunately, the reality is that the value of the bolivar is far lower than that; its strength is grossly inflated.

Working Venezuelans that get paid in bolivars and spend in bolivars probably don't think much about all this, but those who deal with the U.S. dollar and Euro—the merchants—are all too familiar with the discrepancy.

Here's an example of the problem: I want to buy a hot dog on the street. The going price for that item in this city is VE$2,000. But how much does that amount mean to me, a foreigner, converting foreign currency over to spend locally? The answer is an interesting one: It depends.

What if I told you that most every traveler who bought the exact same hot dog paid a different price for it? If your bolivars were dispensed by an ATM, you got the Chavez exchange rate, and you'd be paying about US$0.93 for your wimpy piece of "meat." Same goes for travelers checks. But what if I told you my hot dog cost me US$0.59—close to 40% less than yours?

This "savings" is a result of the hard currency vacuum in Venezuela, and has provided the perfect environment for the black market step in and make a profit.

The crazy thing is that the amount of bolivars a U.S. dollar will get you on the streets of Venezuela fluctuates wildly. I was trying to research what the rate should be, and both news articles and traveler messages left on forums describe an exchange that jumps anywhere between VE$2,500 and VE$4,000 per dollar traded (in the last six months). Recent legislation Chavez passed earlier in year seems to be part of the cause.

Arrival And The Great Hunt

Today is my first real day in the country. I arrived in the city at 1:30 this morning, 35 hours after leaving my hostel in Manaus. This time of morning at a bus terminal in any country is not where you want to be, and especially so in Venezuela.

I had a slight problem though—I didn't have any of the local currency. I had no opportunities to exchange my Brazilian notes as I passed the border, and no one was willing to take them off my hands this far away from the frontier.

On a highly alerted level I chanced walking across the street from the terminal to a bank (while taxi drivers hollering at me from most directions), but the ATM was either out of service or out of cash; I was out of luck. What to do.

I had prepared for an incident like this by pocketing some low domination U.S. dollars to use for cab fare ahead of time. Naturally there were no meters in the taxis, so the haggling began. Although the price was important, making sure I came off as someone that wasn't going to let himself get driven down an alley to be robbed or worse in the early morning hour was more pressing.

I am so wildly happy to be back in a Spanish-speaking country—I am verbally powerful in the communication department again. I do not come off as fresh.

I had written down the first hotel entry out of my guidebook on a piece of paper for the cabbie—I wouldn't be caught fishing through a guide book in front of these guys. At the destination there was no answer to the door (at the early hour of morning), so we moved onto the next posada on the list, where a sleepy, but very happy, old man let me in. The driver received US$5 for the ride (and not trying anything funny).

I can't afford a room at the Posada Don Carlos, but I can afford to sleep in a hammock on the spacious 2nd-story patio inside the establishment.

Getting money was the priority today. The plan was to first try for a black market exchange, but if that didn't work out I'd hit an ATM. The catch was it was a Sunday—Palm Sunday, to boot—and most everything was closed.

There were no money changers idling around the banks because the banks were closed. Every ATM I hunted down was out of cash. I spent several hours wandering around, hungry and thirsty, before I found a fellow who was willing to take me to a shoe store to make an exchange with the owner behind the register.

We couldn't agree on an exchange rate though. On the street the guy said I'd get VE$3,100 for my dollar, and I laughed at him. Getting $3,200 seemed more common, but I wasn't budging. Inside the store $3,300 appeared to make the proprietor uncomfortable, and when we finally settled on $3,400 per dollar, he wasn't so pleased. So much so that when I told him I didn't have a single US$100 note to exchange that he turned me down.

I wasn't budging from the VE$3,400 rate, and was turned down by two more store owners before one finally agreed. We both took a lot of time inspecting the notes to be exchanged. My crisp bills came straight from the mint—obtained in the USA in 2005—and had never been used.

One of the guys idling with the owner when we entered told me to hide the cash all over my body and to watch out on the street as I walked—the fellow that brought me there had left during the transaction.

Alert and defensive, I quickly made my way back to the posada without incident. More research on the black market exchange rate seems to indicate I received the correct amount for my dollars.

What Am I Missing?

Now what I don't understand is why I can't make a profit off of all this. Say I took another US$100 and swapped it on the black market for VE$340,000, and then took that to the bank and had them convert it back to U.S. dollars. Even with the 10% fee the bank will charge for this, that would still give me over US$40 in profit.

Why couldn't I just keep cycling the money like this? Use the same guy to flip the currency into bolivars and just rotate banks. In a single day I could make enough to live here for a month or two or fly to a distant continent.

Personalized Value

I think it's quite interesting how using the exchange rate from the black market has such an impact on the price of things, and my attitude towards purchases.

It's not like I'm getting a better deal—Venezuela's prices (cost of living) are generally in line with the currency exchange rate I received on the street. It's the Chavez exchange rate that is totally out of whack, and screws travelers over.

It's costing me VE$15,000 a night to sleep in a hammock at this posada. The thought of paying US$7/night for this turns my stomach, but US$4.40/night for an open-air hammock for a bed with free Internet access in the hotel—that makes me smile. The 37% "discount" makes a world of difference.

Comments:

Anonymous

April 7th, 2007

I heard this from another person so take it with a grain of salt…

In Venezuela I heard that you cannot exchange local money for USD. I also heard that you have to go to colombia, exchange VZ$ for pesos, then finally pesos for US Dollars and that this is commonly done by westerners. This would indicate some sort of profit along the line (after paying bus ticket costs). What that profit is I am not sure. I have discussed this with friends and we are still looking for the "catch." Otherwise go for it!

Anonymous

April 18th, 2007

great blog entry there. my company send people every 3 months to venezuela and im heading there on friday. If you get between 3200 and 3600 you're doing just fine.

enjoy

Anonymous

November 5th, 2007

Well, that exchange must have been just fine few months ago because the current rate is about 6000 as per my friend that is still visiting there!

Anastasios

March 3rd, 2008

Well, a nice chap close to the hostel in Sabana Grande was offering 6.5 to the euro and something like 5 to the dollar, the blogs say 4.4-4.6 to tthe dollar right now.

I can't find a hammock place at all in Caracas, is the posada this one?
Posada "Don Carlos"
Dirección: Calle Boyacà 26 Casco Historico cerca de la ^Plaza Bolivar, Ciudad Bolivar - Venezuela
Descripción: POSADA "DON CARLOS"
Tel: 0414-854.66.16 / 0285-632.60.17
4 hab triples con aire acondicionados

Peru

Craig | travelvice.com

March 3rd, 2008

Hi Anastasios,

Yes, Ciudad Bolivar is the city that posada is in. The hammock was just fine, and they have a bunch there for people who don't have their own.

Anonymous

April 14th, 2008

I go to Venezuela on a regular basis as my fiance lives there and I will be moving there in August. Because we know a lot of people there I pre-arrange all of my monetary exchanges and even bring some back to the US with me so I have bolivars when I go back there. Typically the exchange rate I get is about $4.5 to 1 Bsf. This is the new Bolivar Fuerte and not the old Bs. I could get a better exchange rate but seeing as these are mostly friends or acquaintances buying them I try to be a little less aggressive with it. A venezuelan friend of mine is a little more aggressive and regularly gets close to a 6to1 exchange rate.

Just remember you have to be careful and only exchange what you need as it can be extremely difficult to get your money exchanged once out of the country.

Anonymous

April 18th, 2008

we do it the other way Around,
I live in the netherlands antilles 30 miles north of venezuela, Venezuelan people come here to change their money for USD (cash advances on their credit card,etc), then they go back to Venezuela and sell those dollars on the black market, last time I heard they got 4 to 5 times the going rate for it on the black market..

Hey if you know any venezuelans that want to come here, just contact me, I'll set it up! :)
Regards

Wilbeen@gmail.com

Anonymous

September 4th, 2008

you should visit http://www.integritypay.net, a group of people who help you getting Bs. at Black market rate.

Anonymous

June 25th, 2009

I've been living in Maracaibo for 9 months, and I'm desperate to get dollars back. At my job, I'm paid in Bolivares (fuertes) and now I'm going back to the states. Do you know of ANY banks that will still trade those??

Britabraod

October 21st, 2009

thats the catch, you cant readily change bolivares back into dollars. You have to have a Venezuelan bank account AND credit card and then have to 'apply' for a maximum of up to US 2000 dollars…plus you have to have proof of travel!!

This difficulty (and limit) in obtaining dollars is the main driver of the black market rate…

angkorgo

January 3rd, 2010

For the benefit of those traveling to Venezuela, the black market is still alive and well as of January, 2010.

A few points:

- RATES. Rates in Caracas are better than in other parts of the country (5.8 in Caracas v. 5.5. in Ciudad Bolivar as of 30 Dec 2009 - and continuing to go up as of 3 Jan 2010) - the airport, obviously, is the worst place to change - e.g., 5.2 or 5.3 as of late Dec. 2009 (because they know you're desperate);

You can find up-to-the-minute parallel rates for Venezuelan Bolivares at:
http://www.dollar.nu/paralelo.php
and
http://venezuelafx.blogspot.com/

Be prepared to accept a little lower than the bid prices listed here unless you are planning to change a lot (e.g., over $400 or $500 using US$100 bills)

- WHERE TO GO. Best places to change in Caracas are Chinese Restaurants and Shoe stores; the area east of Plaza Venzuela (and the Intercambio centre several blocks east / south) is where most of the stores are located;

- IF YOU'RE UNSURE. If you're unsure, ask someone at your hotel to point you in the right direction - as should be obvious, change inside a store and don't hand over cash until you have counted what has been given to you.

- PLANNING AHEAD - TOURS. If you are considering a tour when you get to Ciudad Bolivar, change your money in Caracas and then pay for your tour in Bolivares (as the rates which the tour operators often give are quite bad).

Hope this helps! Venezuela really is a great place to visit… and this is one annoyance which the current system unfortunately requires one to go through…

Aruba

Rowan

March 10th, 2011

I am in punt fijo now and easily getting 8boliv per dollar. Could probably get more if you tried.

Venezuela

Metodex

March 11th, 2011

Rowan i am in Maracaibo and the rate is 8,4.

Minimum wage is 1200 a month.
You do the math.
By the way, would you recommend immigration to Aruba?
I went there on July and i found it lovely there,although expensive.

The United States

BJ

June 6th, 2011

So basically the only way to get dollars out of Venezuela if you have BsF left is to trade the BsF for dollars on the black market? There is no other way to convert BsF into dollars and take them out of the country?

The United Kingdom

Ulises

July 17th, 2011

Great blog entry

anybody knows if EUR or GBP are traded fairly in the black market? and usually accepted in Caracas?

The United States

007

October 21st, 2011

Unused Bolivars should be able to be changed to Colombian pesos in Cucuta (on the border near San Antonio de Tachira) or in the airport in Bogota. Then, change the pesos to dollars. Now, there are about 1900 pesos to a dollar. Not sure what rate the Cucuta exchange houses are currently offering.

Thailand

Samsonite Silhouette 11

October 25th, 2011

the hostelworld website is also cool if you wanna check out hostels at low rates. they accept booking for hostels around the world.. i booked a room with them once when i went to an island in the south of thailand. quite impressive. no prob checking in at all, even the hostel was a bit dodgy. then again, i paid only 8 bucks for a night.

Venezuela

metodex

October 25th, 2011

For those of you still interested in buying dollars, to this date the rate is:

OFFICIAL RATE
1$ = 4,30BsF (Bolivares Fuertes)

Black Market
1$ = 8,50BsF

You can get a better deal on black market dollars (8BsF) if the person is extra extra nice, wich is hard to find. Some will go as far as 9BsF, just because.

If you change Bolivares to Colombian pesos, and then change Pesos for Dollars, you will get a sweet deal. About 6,40Bsf per Dollar.

Canada

robert cumming

November 7th, 2011

I worked in Venezuela from 1974 to 1980. The B was at 4.3. I left on deposit in Banco Latino , Puerto La Cruz an amount of 10,000 Bs, having a US $ 2325.oo.
After devaluation I keep waiting for the b to stabilize but it never did.
After about 2 years the Banco Latino stopped sending statements,

What is 10,000 old Bs worth today ???
PS My salary was 26,000 Bs per month in 1980. $72,000 US per year. Today ??? who knows. rcumming@rogers.com

The United Kingdom

gentleman_raver

February 22nd, 2012

can anyone tell us what the exchange rate is looking like at the moment?

Venezuela

metodex

March 1st, 2012

gentleman_raver

Check out my comment above, it's still the same rate, except black market ones are now basically:

1$ = 9Bs.F

all the time.

Venezuela

metodex

November 27th, 2012

for those of you still interested in buying dollars, to this date the rate is:

OFFICIAL RATE
1$ = 4,30BsF (Bolivares Fuertes)

Black Market
1$ = 15BsF
:S

The United Kingdom

JCHW

March 10th, 2013

As of 10th March 2013 the black market rate is 1$ = 19BsF.

Take care when changing money on the black market because it is a criminal offence in Venezuela and while I do not know anyone who has been prosecuted the authorities are always threatening to do so.

Venezuela

metodex

November 14th, 2013

Well,if anybody is still hanging around here, this is the rate as of November 14th,2013:

$1= 68 BsF (Bolivares Fuertes)

Sad but true. Need help getting out of this place.

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