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Because they're being sold into the foreigners' gag-gift market where demand, and thus price, is higher.
I watched the youtube video about it and as far as i understand:
Venezuela doesn't allow people to exchange in it's currency from other currencies unless you are a person from president family or friends with him
However there is a weird legal way to do so, but it takes a huge amount of time and paperwork and you still can get rejected
There is shady exchangers in the country, but it is illegal and you might get in troubles even trying to do so with the wrong people and I don't think someone would actually do it online
Ok, that sounds extremely stupid in some ways. I kinda get why they would implement restrictions as a control measure to temporarily limit inflation, but other than some edge cases, it seems pointless at the stage they are at now.
If someone can't exchange money for anything other than goods and services in that country, the currency IS actually useless for anyone else.
It is way, way, more complex than what that person's comment makes it out to be. Oversimplification is actually an understatement. Our currency barely holds up as a proper currency in territory, what hope it holds to be useful overseas? Regardless of exchange controls. Which BTW, all countries do. The US has limits for the dollar as well.
I guess my question really was, why implement those restrictions to begin with? Inflation is a complex thing, no doubt, but it seems like too little, too late.
On the surface, even someone trying to buy currency on EBay is a form of demand. Reducing paper currency in circulation seems like a good step. However, with everything being digital now, that is not quite the case anymore.
Oh boy. I could tell you the whole story. It has tons of twists and turns. But the short version is, we are ruled by a military backed kleptocratic bourgeoisie. It was all part of a decades long ploy to funnel private property and wealth into the pockets of a few generals and politicians. It worked. Now they own everything and are the richest people in the country. Their riches are in dollars now, so they only pay lip service to stopping over the frontier contraband of currency paper that is used in the criminal counterfeit industry.
I'll summarize what I commented elsewhere in this thread. It's expensive because it's technically contraband. Our currency is no longer allowed to leave borders, specifically certain old values because they were being used for counterfeit. It was relatively low quality, not many security features and reused bad print plates with bad inks, which made it easy to get bleached and then reprinted to simulate other currencies. Currently there are only 4 legal values: 5, 10, 20, 50 Bolívares Digitales (Bs.). And technically the old 500,000 and 1,000,000 Bolívar Soberano, but those one will be phased out by the end of this year. You'll notice there's no 1,000,000 currency in print anymore. That's because we have made several reconversions or zero removals. Each meant a technically different new currency, with their own paper bills, not equivalent in value. The old 1,000,000 is bound to no longer be legal tender, it won't have fiduciary value with our central bank between the next few year. It barely has use as loose change now.
In reality the new 1 Digital Bolivar (VED) is equivalent to those 1,000,000 Soberanos (VES). But those in turn were already part of a previous reconversion from Bolívares Fuertes (VEF) which was in turn the result of another reconversion from the old Bolívar (VEB). So, that one bill is really equivalent to 100,000,000,000,000 (VEB).
Outside our borders it's technically a collector's item, contraband and out of circulation, all at the same time.
ADD: Also, if neither you or the recipient of the gag gift are Venezuelans, this is a poor taste and disrespectful joke. I get to laugh at and make fun of my country, you don't get to laugh at my country.
I do however laugh at my 10,000 Dong note I keep in my wallet
I guess the transaction and exchange fees don't scale with the inflation of the currency. The exchange server may also have a minimum starting fee.
None of that money is in circulation anymore. It can't legally be exchanged. They're not legal tender and are only collector's items now.
Because it's a loophole, and you're not supposed to do that. There's a blackmarket for exchanging currencies. That's why so many Venezuelans take shady jobs that pay directly in American currency.
I've felt for them though, ever since that storm wiped them out for a while.
Even botting/ creating accounts in runescape, is more profitable than making money in their local currency .
this post was submitted on 24 Nov 2023
59 points (100.0% liked)
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