EDIT: for future reference, I found out that many businesses price accordingly to the black market rate.

Trading at the official Venezuelan exchange rate is, at time of writing, about 1:10 USD:VEF.
From what I've understood black market exchanges offer more than 1:1000 USD:VEF.
They are technically illegal, but its use is widespread to the point of routine.

Now take a look at these numbers from expatisan.com comparing "Monthly rent for 85 m2 (900 Sqft)
furnished accommodation in NORMAL area" between Los Angeles and Caracas.

Official exchange rate for VEF: LA is 52% cheaper
Black market rate for VEF: Caracas is 5288% cheaper

I understand Venezuela is in turmoil with inflation after Chavez' version of socialism had its way. Does the rent for one 900Sqft apt. in LA really pay for 52 apartments in Caracas? Naturally, a Venezuelan's income comes in VEF and not in USD by cash,
so they are not seeing the (assumed) benefit foreigners with USD have.

With that comes my main question, can a foreigner really enter the country with 10,000 USD and turn that into eg. 22 years of rent for the apt. in above example? (assuming steady rate of 37,000 VEF)

There must be something I'm missing here?
Sorry if this Q isn't relevant, but where else to ask than economics stack?


1 Answer 1


The official rate is about 10, but the black market rate is about 1000. Also, yes, apparently the real exchange rate at the 1000 rate is pretty low, in the sense that one dollar buys a lot of local goods, (like boarding). Indeed, that's what it means, 10,000 dollars buys you 1,000,000 VB's, which pays for years and years of rent. The ratio in your numbers is that Venezuela is about 50 times cheaper. In this story, staying in a hotel costs $5, which is also about 50 times cheaper than staying in a hotel in L.A....

(It would be hard to change such a large amount of dollars without getting noticed though...)


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