Who is buying the bolivars? (Mystery solved, depressingly)


What bolivars will buy you

It used to be that the Venezuelan state participated in the country’s currency black market, dodging its own currency controls for fun and profit. Market players have told me they always assumed state oil company PDVSA was the source of the $100 million a week or more that were dumped into the old parallel market via selected brokers. After the parallel market was banned and became a black market, the government continued to speculate on dollar-bolivar spreads and moves. The mechanisms got more mysterious; one game being played by the PDVSA pension fund, was revealed in US court.

It now looks like the Venezuelan state halted its participation in the market sometime just over a year ago. It’s uncanny how the timing lines up with the Amuay explosion and the resulting massive importation of US motor fuel.

But still, someone is buying bolivars. It’s not tourists. There simply aren’t many foreign tourists in Venezuela. Expat workers buy some, yes. But I’ve heard from Venezuelans who have recently gone to Colombia that there is a fierce demand for cheap bolivars in Cúcuta, Colombia. 

What do these Colombians do with those bolivars? They go to Venezuela and go shopping. Without bolivars, they can’t buy up price-controlled goods, cheap home appliances and even cheaper than you might expect wristwatches, and also pay off border officers on the return trip loaded with cheap milk. Let’s see what happens after Christmas, I’m chatting with one expert who predicts an further drop in the bolivar once Christmas-shopping Colombians stop propping up the price.

The price of a bolivar is already low, now to somewhere around 65. With prices like that, 160 bolivars for a 400-gram El Rey chocolate tablet at the Mercado de Chacao is about $2.50, or about half of what an 80-gram chocolate bar of the same quality would normally cost in a normal country. Yes, I’m stocking up. There is a slight surcharge on the milk chocolate bars, because, you guessed it, there’s no milk.

5 thoughts on “Who is buying the bolivars? (Mystery solved, depressingly)

  1. El Cachaco

    There was a report on Colombian W Radio yesterday (or the day before) saying that the passport office in Arauca could not keep up with the demand at it was becoming a nightmare to get a passport (12+ hour lines). For context, getting a passport in Colombia is surprisingly painless, in Bogotá it usually takes one day to be ready and the wait is in the order of one or two hours in the office.

    In any case, they asked an official in charge of border issues and she reported that the number of applications per month had tripled! since January. Partly because Venezuela stopped accepting “pasaportes fronterizos” (http://www.laopinion.com.co/demo/index.php?option=com_content&task=view&id=418207&Itemid=126) and also due to the “diferencial cambiario”.

    The craziness has even caused “colas” in Colombia!

    1. Kepler

      El Cachaco,

      So: a Colombian to get to Venezuela still needs a passport? Not a simple ID? I knew you needed a visa ages ago (and thus, I assume, a passport), but I thought things had improved a little bit in the last decade or so…at least that.
      With my national Belgian ID (thus, no passport) I can travel from Greenland to Turkey.

      It is obvious Chavismo is one of the main hindrances for regional integration, in spite of all this bloody talk about Mercosur and Alba and what not. Imagine if there were really more commercial integration and otherwise. Smuggling would become simply stupid.

      1. sapitosetty Post author

        Yup. Currency control is the biggest anti-integration policy, but there are many more. I am pretty sure that a Peruvian cédula will get you into Bolivia, Colombia, Chile or Argentina. A Venezuelan cédula? Perhaps Colombia?

        1. Kepler

          Sure there are many more. I would guess the first ones are our feudal politicos and the despicable military caste.

          I really want to puke every time I see our Latin American heads of state meeting to discuss integrations…such a waste! That it is easier for a Portuguese to settle down in Finland or Norway than for a Colombian in Chile or Venezuela is amazing.

          In 1990 I entered Brazil with my cédula. I had previously called the Brazilian embassy, so I knew it was fine like that. I remember my brother was with me and he had only a provisional cédula (not even a picture). I realised that only at the border and told him if only I could go through, we would meet in two days. The ONIDEX (or whatever the name was back then) told me my brother had no chance. I talked to the Brazilian control people (I think they were not military) and explained what that shitty piece of paper my brother had was. They said: “OK” and let him pass.

          When I was a wee child (late seventies and start of the eighties) we went to Cúcuta a lot…shopping. Back then no problem with the cédulas. Colombians had it harder than we did.

          I suppose now things are radically different.

          First time I crossed the border between France and Germany (on a bike crossing the Rhine) I was: oh, my God! If we had this! There was just a tiny sign saying “Welcome to France”…and the old custom office, which I wouldn’t have recognised hadn’t I been looking for the building.

      2. El Cachaco

        That’s also a consequence of Venezuela leaving CAN for Mercosur. As a Colombian I can use my cédula to go into all CAN countries (and they also get to join us in the express line at customs in the airport). I’m not too sure about the other countries in South America.

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