Venezuelans Uncover Loophole to Obtain U.S. Dollars

The wonderful economics nerds at Marginal Revolution just dug up a doozy: Venezuelan flights are sold out for the next six months, but are leaving half empty. Why? They’re part of a currency-trading scam that speaks volumes, and goes like this:

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The government of Venezuela has set an official exchange rate for its currency, the bolivar. The rate is 6.3 bolivars to the U.S. dollar. The problem is that most people are prohibited from purchasing dollars at that rate. It’s a rate used for corporate business deals, major arbitrage transactions, international finance, and so forth. The average Venezuelan does not get that rate. The result is a raging black market for dollars, which Marginal Revolution claims have become more than seven times as expensive as the official rate. You can get dollar bills on the streets of Caracas. But they’ll cost you 42 bolivars each, not six.