The disasters in Venezuela never cease to amaze. The socialist government imposed currency controls more than a decade ago and it currently operates three legal exchange rates, depending on what you want to buy.
If that doesnt sound like a mountain of paperwork, I dont know what does.
Last week, oil prices halved, which is crazy in itself since the price of oil hasnt changed in 19 years, according to Bloomburg Business.
This event eliminated one of the three rates and replaced it with a system that lets companies and individuals buy and sell greenbacks at a price set by the market.
Since then, the exchange rate used for payments with foreign credit cards has gone from 50 bolivars to the US dollar to 172. In the black market, the rate can reach about 189, according to dolartoday.com.
That means if you pay with dollars in Venezuela, a domestic flight will cost you $7, a room at the five-star Marriott hotel in Caracas $60 and a Big Mac 92 cents.
At one rate Venezuela is the most expensive country in the world and at the other its the cheapest, said Alejandro Arreaza, an economist at Barclays Plc. Both of them are ridiculous.
For foreigners, Venezuelas Big Mac is now the cheapest in the world, overtaking war-ravaged Ukraine, according to The Economists Big Mac Index, which estimates the cost of living in a country using the majestic hamburger.
Before 2013, foreign credit cards were charged at 6.3 bolivars to the dollar, which is 27 times more expensive than today. In March, foreign currency exchanges in Venezuela went down to 50 per dollar and today the new rate is 172 bolivars per dollar. The exponential growth is unprecedented.
Unfortunately, even if you manage to make it down to Venezuela for the trip, youll still have to deal with shortages of basic goods ranging from toilet paper to deodorant and what the United Nations estimates to be the worlds highest homicide rate among country capitals.
About 25,000 people were murdered in Venezuela last year, including former Miss Venezuela Monica Spear, according to the Venezuelan Violence Observatory.
Given the countrys political and economic challenges, tourists can be hard to come by in Caracas. Venezuela received 986,000 visitors in 2013, fewer than Uzbekistan, Latvia and El Salvador, according to the latest figures from the UNs Global Tourism Organization.
The locals are suffering just as much as foreigners benefit from the exchange rate. Costs for local producers force them to raise prices and stoke an inflation rate that reached 69 percent last year, the highest in the world.
President Nicolas Maduros government rolled out the new currency system Feb. 12 as a dollar shortage crippled local industry and fueled scarcity. Importers of priority goods will still be able to buy dollars at the cheaper, government-set rates.
The new exchange rate should help the country compete, said Ricardo Cussano, president of the Venezuelas tourism industry association.