Drowned without money, the Venezuelan regime offers a better price in dollars than the black market

Venezuelans who are forced to change their savings in dollars to meet their current expenses were found this week with a unique event in the country since the introduction of exchange controls: the official price is higher than that offered by the government. parallel market.

Nicolás Maduro's regime, drowned in recent weeks by US sanctions against its oil sector (almost the only source of foreign exchange), has been forced to apply a further devaluation of the bolívar, the local currency, which has 39, brought closer to Insolite with the "lettuce dollar", proposed in the streets by unauthorized companies. The central bank change has been great, but it has gone almost unnoticed amid the political turmoil of recent weeks.

As recorded Dolar today, a portal used as a reference by millions of Venezuelans for the foreign exchange market, the government now buys a dollar for 3,305 bolivars, while the informal market is worth 3,120 bolivars. According to local badysts, this is the first time in more than a decade of checks that the official rate is higher than that of the black market.

Italcambio, an authorized foreign exchange agency located in the center of Caracas, protected by polarized windows and an armed guard who examines the documents of each client, generally has little movement, but before the new situation, the panorama has changed.

"The waiting line is long … and it takes several days to get your money, but maybe it's worth it," said José Humberto Vivas, who lives from the sale of dairy products and who ignored foreign exchange controls, preferring the parallel market.

The controls began in 2003 under the government of Hugo Chávez, who imposed a socialist system in the country and turned a simple operation – currency exchange – into a stressful operation of looking for illegal money changers and banned gates. by Chavismo and make wire transfers abroad.

In search of diaspora dollars

While the Maduro regime lacks dollars in the context of international pressure and economic sanctions, it takes a capitalist measure, encourage Venezuelans to sell their dollars in the official financial system.

According to badysts, this is a desperate measure to get dollars in a country overwhelmed by US sanctions, which block the arrival of Venezuelan petrodollars in Venezuela and could cost the government 11 billion dollars in the next 12 months. Without one of its most important sources of income, Venezuela will have a hard time getting food and other imported products, which could worsen the shortage of everything and the economic collapse from the country.

Russ Dallen, CEO of Caracas Capital Markets, said the state's empty coffers could now receive dollars through transfers from about 3 million Venezuelans who have fled the economic instability of the country. countries and went abroad.

Until now, they mainly used black market money changers to send about a billion dollars a year to their loved ones, but they may now be inclined to use official channels if they offer better rates. currency exchange. "They are going to get the dollars from the diaspora," Dallen said.

The government also deals with get more dollars from the richest Venezuelans and some tourists who visit the country and they use foreign credit cards, which use official exchange rates, which would have been unthinkable a few weeks ago.

But the strategy is controversial. Opponents of Maduro say selling dollars to the government equals to finance the repression. Others argue that the measure will not close the gap between the two rates, which allows Venezuelan rich to take advantage of distortion and accumulate significant profits.

Asdrúbal Oliveros, an economics consultant in Caracas, predicts that will not be able to collect the dollars you need to solve your financial problems. US sanctions may, however, lead some foreign banks to suspend credit card transactions in Venezuela, as recently made Bank of America.

The regime and pro-government entities they owe about $ 150,000 million to foreign creditors and the foreign exchange reserves available to the government are only $ 8,000 million.

Obliged to pay interest on the few loans and bonds for which it is not yet in default, the Maduro government must finance its huge budget deficit by issuing new bolivars, generating inflation in turn.

Last year, inflation in Venezuela reached 1 million percent. "The problem of hyperinflation is essentially fiscalOliveros said: "If you do not work in a fiscal discipline effort, to reduce the deficit, to reduce the monetary funding of the central bank, you will not be able to reduce it."

Other hurdles could limit the central bank's ability to raise dollars. It currently takes four days – an eternity in today's hyperinflationary Venezuela – for bolivars bought at the official exchange offices to be deposited in a personal account. Cash foreign exchange transactions have stopped for months due to the shortage of notes. "Confidence, speed and ease weigh heavily on foreign exchange operations," said Oliveros.

Last week, dozens of people trying to sell small amounts of dollars and euros at the official rate could not do it because transactions were suspended due to a failure of the central bank's trading platform.

"I feel frustrated and cheated," said Adolfo Estanford, a lawyer who wanted to exchange 20 dollars. He said that he needed money for food and transportation. "It seems like there is a lot of improvisation," he added.

(With information from AP / Manuel Rueda)