Socialism has consequences when the rest of the world is capitalist.
Thanks to their country’s managed currency rates, Venezuelans are now pulling off epic scams as the value of the dollar spikes against the bolivar on the black market, Reuters’ Girish Gupta and Andrew Cawthorne report.
Right now, the street value of greenbacks has soared to 7x the government’s rate of VEF6.3 to the dollar.
So those Venezuelans who are able to are flying abroad, swiping their credit cards to take out a cash advance, flying home, and making bank.
Here’s how it works, according to Bloomberg, which has also reported on the phenomenon:
“A 27-year-old trade analyst from Caracas said she earned six times her monthly salary by travelling in April to Lima, where a business swiped her credit card and gave her $US1,600 cash, charged at the official exchange rate of 6.3 bolivars per dollar. When the analyst, who requested anonymity because what she did is illegal, returned to Venezuela, she sold the dollars at the street rate of 29-to-1, enough to pocket 25,000 bolivars after paying off her credit card and travel expenses.”
The trade more than pays off the cost of their travels.
Although some are not even bothering to travel, Reuters says, instead mailing their credit cards to a friend, who swipe out the card on their end and ship the cash back.
“It is possible to travel abroad for free due to this exchange rate magic,” local economist Angel Garcia Banchs told Reuters.
One Venezuelan woman said, “I’ve been able to buy new clothes and give some cash to all my closest family members!”
The scam even has a name: “el raspao,” or “the scrape.”
And it’s proven so popular that flights abroad are now booked solid for months.