In the comments on a post I wrote earlier this year someone requested that I write about the black market exchange. I don’t really feel comfortable writing about it for a couple of reasons: 1) it’s technically illegal even though so many people do it; and 2) even after living here for going on three years I still don’t understand all of the details.
Of course I have some understanding of how it works, but it changes all the time AND like this article says, there are FOUR official rates AND the unofficial rate that most stores use to calculate prices. It is really hard to pin down all of the details.
Here is a hypothetical scenario a newly arrived expat will face:
You go to a grocery store and do your shopping for the week for the first time. Your total is 2000 Bs because you went to the big chain store in town where you can find everything at once. Now you need to pay and you have a few options: 1) you can get out the stack of Bs (that your work may have arranged for you to get while you are working on setting up your banking stuff) and count out twenty 100B notes; 2) If your school knows someone at the bank and rushed your debit card you might have had time to do a transfer with someone so that you can pay with your debit card; or 3) you might try to take out your American credit card and pay because that is what you are used to doing in the US.
Lets talk about each of these payment choices:
1. Cash Bs: Many people caution against carrying around this much cash Bs because they worry about theft. I’m used to it because I didn’t have a local bank account for two years and it was the only way I could go grocery shopping. It can still take a second to count out your money so I always try to have it organized and ready (one tip is to make bundles of 1000 bs or so). I also like cash because it is easier for me to use the envelope method to budget with.
2. Local Debit Card: This is the most popular method with locals and many expats. They feel safer carrying just this card in case they were robbed. My bank asks users to set a limit to prevent people from getting their accounts drained if this does happen. I’m hesitant to use it because the debit machines frequently break down, sometimes there are cash only lines, and the debit card transactions take longer to process.
3. US Credit Card: This is the one thing that you should never do in Venezuela. Let me repeat: DO NOT DO IT! Just keep your credit cards locked up at home! Suddenly that 2000Bs that you might have been able to exchange at the rate of 150 for cash or transfer and would have only been $14 or so (2000/150=13.33) is now being charged on your credit card at the official rate of 6.3 (2000/6.3= 294.12).
Let’s Break it Down
Basically there is the official rate of 6.3 and if you have access to dollars you can get a rate similar to whatever is listed on dolartoday.com or on their Instagram: instagram.com/dolartoday. Hypothetically…someone wants dollars because they can’t find them using official means, so they ask you to exchange with them and will either transfer Bs to your debit card or give you cash Bs. People can get very creative with the different ways to exchange. I have heard of people even using Amazon gift cards and Paypal (I am not exactly sure how this would work though)!
I realize that I am not very good at explaining all of this very well so if you are considering a job in Venezuela, please read the following articles:
Venezuela: Banks & Money (The clearest explanation for travelers)
Venezuela’s Bolívar Currency Hits Record Low on Black Market
Travel Alert: Dollars Fetch A Premium In Black Markets Of Argentina, Venezuela
How to fix Venezuela’s troubled exchange rate
The ‘Cheapest’ Country in the World (slightly out of date now that you can no longer find flights like this)
A black market in Cyprus? Lessons from Venezuela (a fascinating comparison between two countries)
Well, I’m not really a numbers person and my eyes have started glazing over at all of the charts and numbers I’ve been encountering as I research this post. I hope I have shed some light on the parallel exchange here, but it is best if you just come here with an open mind, because even after living here for a while I am still surprised by the different ways things work out!
Comment below: Have you ever encountered a parallel exchange? Was it as complicated as Venezuela’s? Is the exchange still confusing even after this post?
This is an interesting post, the black market exchanging is also very active where we are in Vietnam. Everything, including money matters, is certainly different from what we know in the US:)
I didn’t know there was a black market exchange in Vietnam! I have heard about the one in Argentina. I wonder where else there is a parallel exchange rate?
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Thanks so much for trying to explain! I really appreciate it and now we have a much clearer idea of what to expect when we arrive in August (hypothetically). Happy Holidays!
I’m glad I could help. The biggest tip would be to bring your check book with you, quite a lot of cash (dollars preferably), and to check https://dolartoday.com/ any time you want to exchange.
Happy holidays to you too!
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