“I buy dollars, I buy dollars!” shouts César Rivas at intervals throughout the day from an old, broken chair. In his hand he has a bundle of bolivars, the devalued currency of Venezuela displaced by the American bill.
He is in a busy commercial area of Caracas along with other money changers shaking the bales they offer for sale. “What we do is transform bolivars into dollars,” Rivas told the The Vermilion.
In Venezuela, more than 90% of prices are marked in US currency, according to experts.
Since 2019, the dollar has been imposed as the de facto currency in the country, without resistance from the government. President Nicolás Maduro even came to see informal dollarization as an “escape valve” to an economic crisis that saw its most critical moment in 2018 with recession and hyperinflation.
So, not only did he reverse strict exchange controls, but he also freed up prices and promoted imports to end an alarming shortage of food and medicine.
The dollar remained the de facto currency to the point that today “50% of commercial transactions are made in foreign currency,” he explained to the The Vermilion the economist Jesús Palacios.
And the bolivar, viewed with distrust by Venezuelans, is used for retail operations, completing a payment or for bus fare.
That’s where the business of Rivas, 35, comes in: “we stand here shouting and saying ‘I’ll buy your dollar’ and the people who have currency and need cash (…) the simple one” look for it, he tells The Vermilion.
But how does this street business operate?
Rivas and other people dedicated to exchanging money on their own rely on bus drivers.
Bus drivers, who in Venezuela operate through private cooperatives and do not depend on the government, receive payments from passengers mainly in bolivars, which they then want to exchange into dollars.
“You buy from the truck drivers, they give us a price and you earn something,” explains Manuel Castillo, 44, also dedicated to this informal market.
Their clients are people who need loose money for the ticket, for a small purchase in the market, or to complete payments, because changing dollars is almost impossible due to the lack of low-denomination bills.
This is what Rivas calls “simplifying” the dollar: “As they have foreign currency and need cash to buy food, it becomes easier for them.”
The change is not equal to the official one, since these men must seek their gain.
Ana Carrillo, 25, complains about the empire of the dollar in the country, but in the end what she earns from sales on the candy street she changes to the greenback.
“Every week I come and buy dollars from them, 20, 30 dollars so I can buy things for my daughter,” he says. “You go to a supermarket and it’s $5 for a package of diapers; a rice, a dollar and a half; If we are not in dollarization, why do we have to buy in dollars,” says Carrillo.
The government has rejected the idea of formally dollarizing as happened in Panama, Ecuador and El Salvador, and has even tried to promote “de-dollarization” and the use of the bolivar, applying a 3% tax on foreign currency transactions.
But the distrust in the Venezuelan banknote is very great. So far in 2023 alone, the bolivar has lost almost 50% of its value: from 17.55 per dollar in the first quote in January to 34.7 currently.
“Having placed restrictions so that dollarization could advance – speaking in a context of a government that does not have fiscal and monetary discipline – led us again at the end of last year to new aggressive increases in the exchange rate and inflation,” he explained to the The Vermilion the economist Jesús Palacios.
The bale of bills almost doesn’t fit in Manuel Castillo’s hand, and he looks at it with disdain.
“This doesn’t even cost $30,” he says. “It’s pichache”, worthless.