From Marketwatch
By Jasmina Kelemen
Last update: 2:28 p.m. EDT June 6, 2008
The dollar still reigns in Caracas
Locals get creative in hunt for greenback, and black market thrives
Middle-class Venezuelans routinely hop the borders to neighboring countries to get their hands on illicit dollars, spawning a thriving and lucrative black market in local currency exchange. Some gamble on nearby islands, while others make fake shopping excursions to Panama or Colombia.
Middlemen, taking a hefty cut, deliver the dollars and manufacture an elaborate trail of fake receipts in case the Venezuelans are later audited by the currency control board at home.
Locals do all of this in a bid to protect themselves from the region's highest rate of inflation and to circumvent stiff exchange controls President Hugo Chavez imposed in 2003 to halt the flow of capital out of the country.
"People outside Venezuela don't understand how uncomfortable this situation is ... and the things we have to do to avoid the law," said one young woman who works as an administrative assistant for an international company. She declined to be identified.
