In Silvio Canto’s podcast
talking about Venezuela & other US-Latin America stories with special guest Comandante Cazorla.
Live now, and archived for your convenience.
The story on airplane tickets I mentioned is A New Twist on Capital Flight: Venezuela’s Absurd Airfares
Owing to currency controls erected under former President Hugo Chávez, Venezuelans have turned into masters of currency arbitrage, exploiting the mismatch in the official and illegal exchange rates for the dollar and bolivar. While the official rate is pegged as 6.3 bolivars to the dollar, the black market rate is seven times higher, as Reuters reported, leading to a rush to obtain dollars abroad that can be sold back home. Flights are sold out for months in advance because of a quirk in travel rules allowing anyone with a valid airline ticket to exchange up to $3,000. The maneuver is known as el raspadito, or the scrape.
But not everyone involved in the arbitrage scheme is flying—just booking a ticket is enough, and credit cards can be sent abroad to be swiped for cash advances. The heavy profits available to travelers mean that some do end up with no-cost holidays. “It is possible to travel abroad for free due to this exchange-rate magic,” economist Angel Garcia Banchs told Reuters.
Tags: Fausta's blog