Exchange rate woes in Venezuela

Arrrrgggghhh! They say if you fail to plan, plan to fail. My foray into Venezuela was not planned, so I was not completely prepared for the place. I usually check out the exchange rates on line before I enter a new country, so when I change money I know what I should be getting. At the border, when I changed my Colombian pesos into Venezuelan bolivars, I got almost twice as much as I expected. At first I thought the guy made a mistake, but I did not have time to check it out.

 Well as it happens there are two exchange rates for bolivars. An official one and a black market one. Since September the value of the bolivar has fallen so much that the black market rate is more than twice the official one. Now if I had been on the ball I would have withdrawn a bunch of Colombian pesos and changed them all at the border at the higher black market rate. Unfortunately I did not realize this until after I had withdrawn bolivars from the ATM and paid hotels with my credit card. These transactions are converted at the official rate of 2100 bolivars per dollar. So this misstep cost me over $500. As I said, arrrrgggghhh! Live and learn I guess.

When I realized my blunder I began looking for black market currency traders. Although illegal, many countries barely enforce the law. The last time I had to trade on the black market was in Romania in 1993 where I had to meet this guy in a car and do the deal. Here, the hotel manager cashed my travelers checks in the lobby, albeit at a low rate of 4000 bolivars per dollar. In Valencia I needed more cash. This was trickier. I had to go to the bus station and ask a few people quietly where I could buy bolivars. They seemed nervous discussing the idea. I guess you can get in trouble for trading. Finally, through, I was directed to the Portugese owner of a jewelry store who gave me 5000 bolivars per dollar, even through he was a bit unhappy I did not have euros. The weak dollar is not too popular in Portugal I guess.

Anyway, enough of that. My girlfriend Jenear came to visit for Christmas. We stayed a couple days in Caracas then went to the Caribbean coast, to the beach town of Puerto Colombia. It was recommended by the usually-reliable Lonely Planet, but somehow did not live up to expectations. The low point was discovering a huge cockroach in my glass of rum and coke.

Here are a few shots of Puerto Colombia.

This one is great. The more I learn about Hugo Chavez the less I like him. They actually have a doll of him. It was hanging on the wall of a little cafe. Is that egotistical or what?

3 thoughts on “Exchange rate woes in Venezuela

  1. Capt. Don Kilpela Sr. January 3, 2008 / 5:27 pm

    When we lived and operated in Curacao, we didn’t have exchange problems because the Curacao guilder is pegged to the American dollar and floats with it. This is due to the extensive off-shore banking network in Curacao. In fact, in 1981 the exchange rate with Venezuela was so favorable to Venezuelans that the development money was pouring into Curacao. When the dollar crashed in 1983 (and the guilder with it) the Venezuelan investments dried up and many projects were just left half done; they simply walked away. Moreover, we saw no more Venezuelan private jets coming in with the rich buying everything in sight. Since then, to curry favor I suppose, Chavez has pushed money into Curacao at an amazing rate. In fact, so has the U.S. Whereas in 1983 there was no obvious US military presence now there is a huge US Air Force contingent and F-15 jets, etc. and patrol boats circumnavigate the island on a regular basis. The refinery we worked for was owned by Shell then but now it is owned by Venezuela.

    Thanks for the interesting post, Kev.

  2. Kevin Koski January 4, 2008 / 4:09 pm

    Apparently many Venezuelans go to Curacao to take advantage of a regulation that allows them to spend up to $5000 per year on their credit cards while traveling abroad. They go to Curaçao, buy $5,000 of casino chips, exchange the chips for dollars, return to Caracas, and then sell them on the black market. I guess it is profitable

    I also now understand why Venezuela has such horrible traffic problems. The price of gas is only 12 cents gallon!

  3. jojo January 20, 2008 / 4:57 am

    I haven’t been out of the country but twice in my life ( Curacao and Mexico) but while in Curacao I did manage to see the Venezuelan coast line when the boat made it’s voyage from Curacao to Bonaire. It was awesome, incredibly mountainous and jagged, unlike the shoreline of Lake Superior which is so low. So dumb, I brag about it. Not many Yoopers have seen the Venezuelan coastline.
    Love Ya,

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