On DolarToday, the actual exchange rate between BsF (Bolívares fuertes) and the U.S. dollar can be found. However, in other places you will read that the exchange rate is about 6.4:1 (Bolivares fuertes:USD). This currency has been called black exchange - i.e. black market. In addition, it was the exchange you got from CADIVI in some conditions.

Why is it like that? How is it possible there are two different exchange rates?


Venezuela is a command economy, and one that isn't doing terribly well right now, with rampant inflation in the several hundred percent range. As such, they've tried to limit or eliminate exchanges between their currency and foreign currencies.

Currently, they allow a limited amount of exchange at fixed rates (according to a Bloomberg article, those vary between 6.3, 13.5, and 200) for certain purchases, and then otherwise disallow exchange between the currencies. However, there is a black market (illegal in Venezuela, but legal in the US) which allows the price to float, and is much higher - 800 or so according to that article from last year. A recent Valuewalk article lists the black market rate at closer to 900, and slightly different official rates. It's worth a read as it explains the different official rates in detail:

Currently there are four exchange rates: First is the official one, called CENCOEX, and which charges 6.30 bolivars to the dollar. It is only intended for the importation of food and medicine.

The next two exchange rates are SICAD I (12 bolivars per dollar) and SICAD 2 (50 bolivars per dollar); they assign dollars to enterprises that import all other types of goods. Because of the fact that US dollars are limited, coupons are auctioned only sporadically; usually weekly in the case of SICAD 1 and daily for SICAD 2. However, due to the economic crisis, no dollars have been allocated for these foreign exchange transactions and there hasn’t been an auction since August 18, 2015. As of November 2015, the Venezuelan government held only $16 billion in foreign exchange reserves, the lowest level in over ten years, and an amount that will dry up completely in four years time at the current rate of depletion.

The last and newest exchange rate is the SIMADI, currently at 200 bolivars per dollar. This rate is reserved for the purchase and sale of foreign currency to individuals and businesses.

  • How does this limit/elimination help? – Pichi Wuana Mar 1 '16 at 20:07
  • Well, it doesn't really, but it's a common thing in command economies to avoid capital flight. It doesn't really work since the black market is perfectly functional, but... – Joe Mar 1 '16 at 20:08
  • The exchange restrictions help because the nation only has a limited supply of foreign currency available. It only has its reserves, plus whatever it can bring in by providing goods or services people will pay foreign currency for. The intent is twofold: keep everyone from cashing out their bolivars; and preserve limited foreign currency reserves for imports of goods like food and medicine. – Zach Lipton Mar 1 '16 at 22:19
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    It doesn't help. Indeed, it's arguable that it makes things much worse for almost everyone in the country. However, it helps the people currently running the country to hang on to power, and that's what's important to them. – jamesqf Mar 2 '16 at 3:58
  • I should clarify "help." The exchange restrictions are intended to "help" fulfill the monetary policy of the people in power, who will have different goals from the people trying to exchange their money. Depending on the state of the black market, the restrictions may not have any real effect at all. – Zach Lipton Mar 2 '16 at 9:00

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