Venezuela appears to have created a disastrous multiple exchange
rate system:
“An importer who
pledges to purchase basic necessities to bring into the country can buy a
dollar for about six bolívars. But walk up to a bank teller and the same dollar
costs 178 bolívars: nearly 3,000 percent more. For the 264 bolívars that it
cost at the time of this writing to buy one black-market dollar, you could buy
42 dollars at the official rate.
The system gives
rise to a mind-bending tangle of economic distortions. By one calculation, with
a single $100 bill exchanged at the black market rate, you can buy enough
subsidized gasoline in Venezuela to drive a Hummer around the world 28 times. A
new Toyota Corolla retails for about 1.9 million bolívars — that’s either about
$300,000 (at one exchange rate) or around $7,200 (at another), take your pick.
As in our fable, the exchange-rate regime creates huge incentives for importers
to pocket their cheap dollars rather than bring in goods — and that gives rise
to lines. Long lines. For all the basics.”