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Venezuelans Line Up to Buy SIMADI US Dollars

By: Contributor - Mar 5, 2015, 1:18 pm

EspañolOn February 25, a stream of curious and doubtful clients entered through the doors of Italcambio, one of Venezuela’s main currency exchanges, in downtown Caracas. They looked around for the line, a habit learned by Venezuelans through their daily ordeals in supermarkets and pharmacies to get basic products.

(Reportero24)
For 12 years, currency exchanges have done little more than send remittances abroad, constrained by government exchange rates. (Reportero24)

Such wariness wasn’t exactly unfounded. Most Venezuelans have barely set foot in a currency exchange for 12 years: the government’s harsh currency controls enacted in 2003 have made it nearly impossible to get foreign currency through official means.

Up until February 18, one could only get US dollars through a painfully bureaucratic banking procedure — most just resorted to the black market. But with the new SIMADI exchange tier, Venezuelans can once again secure foreign cash in certain exchanges, stores, and banks authorized by the government.

Given the lousy record of previous government currency control schemes (including CADIVI, SICAD I, and SICAD II), rumors and uncertainty about the new system abound. On that Wednesday afternoon, you could feel restlessness in the air. People crowded around the counters, and employees often had to check with supervisors about all the requirements needed to buy and sell currency.

“We usually didn’t have this amount of people. Our clients used to come here only for remittances and short trips abroad,” said Italcambio supervisor Gregorio Daboin, during a short break from his customers’ insistent questions.

Against all odds, the SIMADI system is fairly straightforward. Some people entered and left the building instantly when they saw the queue, but the majority stayed to wait their turn. After hurling questions at the employees, many were amazed to discover that the only requirements were a valid copy of their tax ID and their national ID.

To be able to trade currencies, one has to first register with the system. Those that had already registered the day before only had to wait a few minutes at the counter.

Without further paperwork, they could buy up until US$200 daily, $2,000 monthly, and $10,000 annually. If they wanted to send money abroad, they were allowed to buy $300 on a given day. The only obstacle is the firm’s remittance charge, a 3 percent rate to be paid in bolívares.

Those with dollars to sell, on the other hand, were far fewer. There was no line in this case, despite the exchange charging them no extra rates if they had cash.

The influx of people looking to buy and sell currency on Urdaneta avenue in downtown Caracas was constant. As the word got out that requirements were minimal, clients rushed to get registered.

But opinions about SIMADI differed widely. For some, it was no less bureaucratic than before: “This is way too slow just for registering. I’m bored. I’m leaving,” said Richard Monsalve before he stormed out of the store, while others outside complained about having to wait in line.

“It was fine for me,” said Liseth Goméz, as she waited for her husband to finish buying US dollars.

“I think it’s the best so far. In other places it was exhausting,” said José Sanchez after leaving Italcambio, with others agreeing that it was much faster once you were registered.

“So far everything has been smooth. We’ve had many customers,” said Daboin. For most of the day, newcomers could buy US dollars at a rate of 1 to 172 Bs.

However, outside the legal venues, the black-market dollar rate kept increasing. By the end of the afternoon, the website DolarToday informed that it had climbed to 202 Bs. Just two days later, it was 222 Bs.

It remains to be seen whether SIMADI will accomplish the government’s much-desired goal of eliminating the black market in currency trade. So far, it’s only served to boost unofficial rates.

Translated by Daniel Duarte. Edited by Laurie Blair.