Friday, August 13, 2010

Chavez' U.S. Dollar: Green Lettuce Anyone?

In Venezuela, there are three types of exchange rates for the U.S. dollar: the basic dollar, the oil dollar, and the parallel dollar.

However, legally, there is only the first two. The real one (the 'parallel dollar') is illegal.

Green lettuce, or 'lechuga verde' in Spanish is the way that Venezuelans have found to know the current exchange rate via the Internet.

One dollar is worth 2.6 Bolivars at the official exchange rate, but this quotation is only permitted by government for basic needs, as imports of food and medicine. The oil dollar is set at 4.3 bolivars and should in theory work for buying or selling the rest of merchandise and necessities. However, with the drop in output and oil prices, the Venezuelan government does not have sufficient foreign exchange to finance all imports of the country, which reach over 85% of consumption.

This has spurred a huge black market as importers struggle to get their hands on dollars. The parallel exchange rate is closer to 9 to 1. This is today's' quotation at 8PM, from the lechuga verde site:

Chavez handles this problem by forbidding to mention the existence of a black market for dollars in public. Hence, the Green Lettuce.

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