People walk in and out of a currency exchange office in Caracas on February 19, 2015. The Venezuelan bolivar opened Thursday at 172 to the dollar on the first day of a government sponsored exchange meant to compete with the black market.FEDERICO PARRA/AFP / Getty Images
Venezuelans lined up Thursday for their first chance in years to change bolivars into dollars without having to justify why they need foreign currency.
The socialist South American country launched a new exchange system last week that allows individuals and businesses to circumvent decade-old currency controls and legally buy greenbacks. Last week, the system aimed at easing the country's crippling economic crisis went into effect for foreign credit cards. On Thursday, Venezuelans got their first crack at legally trading local currency for paper dollars at a rate approaching the one used on the country's black market.
People waited for hours in the afternoon heat to buy dollars at a normally empty currency exchange house in downtown Caracas. Many said they wanted to protect their savings from Venezuela's 68-per-cent inflation, or to travel abroad.
The new market sets the exchange rate at about 170 bolivars to the dollar. That compares with rates of 6.3 or 12 bolivars per dollar Venezuela uses for priority imports, and 190 bolivars on the black market.
Luis Silva, 78, lined up outside the exchange house at 8 a.m. The former importer hopes to use the foreign currency to visit his granddaughters in Miami, and buy goods online that he can't find in shortage-plagued Venezuela.
"I haven't seen a dollar in years," he said, still cheery after waiting four hours. "I'm going to buy as much as they let me."
Several dozen people behind him, 85-year-old retired professor Jose Juvenal clutched 1,800 in bolivars that he hoped would buy enough dollars to travel to his native La Paz, Bolivia. At the new exchange rate, his wad of bolivars would net just a little more than $10.
Part of the reason people are unsure about their money's value is that for years the government has allowed Venezuelans to change bolivars at a rate of 6.3 to the dollar when they travel abroad, or when they can show that they need dollars for business purposes. Under that earlier scheme, Juvenal's 1,800 bolivars would have equalled nearly $300.
But with the government in the throes of a cash crunch, officials have begun limiting Venezuelan's ability to change bolivars when they leave the country. So Juvenal said he was happy for a chance to buy dollars, even at a dramatically weaker rate.
Outside, a security guard not authorized to speak to the media chuckled at the scene, calling it "madness."
He plans to convert his savings into dollars, too, but he's waiting until next week.