Photo: iStockPhoto, retrieved

I keep hearing it, on Twitter, on WhatsApp, in calls with distraught would-be dollar buyers, all over the place.

“I miss DolarToday.”

The demise of the once-dominant price site for the parallel dollar left Venezuelans disoriented. DolarToday created the illusion of transparency — the fleeting sense that there was some knowable number of bolivars a dollar was worth. It was always, of course, subject to manipulation but in a rough, approximative kind of way, it did the trick: DolarToday was a marker, a place to start any given negotiation on any on-the-side forex trade.

Some months ago, it stopped working. The gap between the real black market exchange rate and the numbers in the iconic white-on-green screen started to become too obvious to ignore. When it became clear the gap would persist, confidence in DolarToday collapsed and black market dollar traders abandoned it en masse. The DolarToday era is over.

In its place, a cacophony of new sites: over half a dozen black market exchange rates, Venezuelans feel that buying/selling dollars is closer to walking over a tightrope while blindfolded.

But what happened? Why did the bottom fall out of our confidence in DT?

There have been many rumors about shady operators buying the site to manipulate it. Maybe the government really believed their own story about how a single website run by a guy at a HomeDepot in Alabama had magical powers to rearrange the economic decision-making of millions of Venezuelans. Maybe they believed it so much one of them finally had a revelation, made the Alabama HomeDepoter a proverbial “offer he couldn’t refuse”, bought the site and started messing with it as a way of trying to slow the bolivar’s depreciation.

What the market really misses about DolarToday is having a single exchange rate that everyone accepts, no questions asked.

If so, they’re now learning a lesson that should’ve been too obvious to ever need teaching: prices track supply and demand, not the arbitrary whim of hardware salesmen. Blaming DolarToday for economic instability was, at best, a confession of economic illiteracy. People who genuinely believe the thermometer is to blame for the fever ought never to have been allowed to set economic policy for an entire nation.

Of course, we can’t know for sure if the government bought up DolarToday. It could have been someone else: a canny player seeking to manipulate dollar prices on the margin long enough to make a killing. It’s impossible to tell — and impossible to find out how big a profit such a buyer may have made before pushing his luck too far and killing the goose that lay the greenback egg.

In reality, though, the smell of scam had attached itself to DolarToday for many years before it stopped working. Why does the market miss it?

It doesn’t miss it, of course, with it’s absurd, screeching headlines and garishly mismanaged graphics. What it misses is having a single exchange rate that everyone accepts, no questions asked.

With no widely trusted reference price out there, dollar sellers and buyers are now forced to haggle every single time. That takes time, it causes stress and uncertainty and, ultimately, costs money. Black markets are always inefficient: without a single, agreed-upon price, they’re worse.

None of this is necessary. There’s never been a good reason why consenting adults shouldn’t be allowed to trade currencies with one another openly, in a transparent marketplace with prices visible to everyone. The government’s refusal to allow this has caused a million everyday absurdities in Venezuela, and continues to cause new ones every single day.

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39 COMMENTS

  1. The difference between how easy it is to send a Venezuelan who has just emigrated to another nation a financial help, compared to the difficulty (or impossibility) of giving that same help to an ordinary banked or non banked Venezuelan in Venezuela, makes one want to vomit… or worse

    • Heh, you tell me, now banks in Venezuela like banesco are delaying or outright blocking transfers at a whim when one tries to sell any meager amount of currency.

    • I may be able to help you in the Caracas area.
      Some of the people selling Bolivars have out of country (US) accounts that you can deposit into and for a fee they distribute the Bolivars to your intended recipient.
      I have been assisted by a private individual that distributes Dollars without taking a fee. The recipients then sell them as needed. This allows them to only sell what they need and hold the rest. It does help a little against the runaway devaluation of the Bolivar.
      Caracas Chronicles has my permission to provide you my contact details.

  2. Could it be simply that Sebin threatened relatives of Dolartoday’s owner?
    Anyway, I suppose that sooner than later one of the current players will become the new reference, just as prices regulate themselves outside Venezuela, some information providers will start to become more truthful . Or do I miss something?

    • Whatever the explanation, it is all the same. Even when it “worked”, DolarToday was not a solution; it was just yet another way people try to manage the chaos when faced with the stupid restrictions and the stupid opacity of everything in Venezuela. Just another ad-hoc solution, prone to all the problems and doubts we seen.

      All because the easy, clear solution is ideologically repugnant to the group of idiots and thieves in power.

  3. Careful…

    DolarToday offered information that was only gathered, not analyzed and subjugated to rigorous economic scrutiny.

    Appreciate DT for what it is, not what you want it to be. From what I have read, its only one guy getting information from a few sources. It isn’t Milton Friedman offering macroeconomic theory.

    When I get my shoes shined, I get my “weekly news spin” from the guy who shines shoes, not from the owner of the Shinola Company.

  4. You find, on occasion, broad disparities between the bid and asked on the best financial markets in the world. That usually occurs during periods of severe stress on the markets, when things are notably out-of-whack. Financial crises. DolarToday did a spectacular job, in my opinion, of providing reference prices over a sustained period of time, all of which remains a time of extreme stress and financial disaster. The prices today probably reflect the black market reasonably accurately.

    If there was indeed manipulation, it wasn’t through buying the site and posting false prices, but in going to quotation sources and manipulating the exchanges there. That’s how manipulation is done. You find a source of quotes DT relies upon (takes quotes from), and consistently offer to trade dollars and euros for below market prices. DT then factors those quotes into its data. You can do it on either side of a market, bidding prices up to create the illusion of a rising market, trying to get people to “chase” it, and selling into that; or you dump the commodity on the market to artificially drive prices lower, creating the illusion that something is wrong, trying to get others to sell into it, buying at the lowest prices.

    Given that for the black market BF all trades cannot be registered, since there is no organized single supervised commodities exchange, you have to sample from actual recorded exchanges of currency. What may have happened is that DT (whoever they are – it can’t be just one guy) realized they had a disparity with other quote providers, and took steps to remedy that, and possibly they were using an equation that threw out the higher prices as speculative or abusive. If, for example, they were relying on quotes from ten exchange houses, and three of those were manipulated, that might have been enough for the two months or so that they missed the market – if they did. Looking at it more closely, if market manipulators knew which days quotes were transmitted, they might have gotten in the last trade of that day at artificially low prices, essentially dumping dollars and euros, to generate false closing prices which would then be picked up by DT. Maybe they picked up on that at the opening the following day, getting in the first trades and buying back dollars and euros at the published DT prices.

    None of this is any secret, btw. The U.S. Treasury does it, and it is well-known, but the U.S. Treasury tries very hard to forecast actual supply and demand, anticipate that, gauge it against fiscal policy and goodness knows what else they are looking at in real economic terms, then carefully choose a right time (and price) as an inflection point. They do not have nearly enough money to go against economic trends, but they do have enough to place the “first trade” in a new trend based on the parameters they follow. And people do pay attention.

    The U.S. has some of the best regulated and documented financial markets in the world, but I have seen in my limited exposure bid/asked spreads in excess of 60%. The last was during the financial crisis of 2007, when 14% tax-exempt interest rates prevailed. Not more than two years later, interest rates were down to less than 1%, so you had a months-long disparity.

    As far as other sites offering black market exchange rate quotes (approximations) that’s a good thing. More liquidity, more transparency, more quote sources, harder to manipulate. Maybe sampling of trades occurs throughout the day, and taken on an average.

    Free markets: you get it right, or you’re gone.

    • Excellent reply. DT is primarily an information estimate of border transactions, a transaction price realizable to the seller. Most other sites are dealer sites quoting THEIR seller’s price, but from which they subtract 30% intermediary margin to give you, the individual seller, a much lower price, similar to DT’s information-only price. In any event, none of the prices is keeping pace with internal hyperinflation pricing in Venezuela.

      • Thank you. I did not know the difference you point out. Even at airports that are basically a convenience for comparatively small change, the highest spreads I’ve seen are 6%. Commercially, in futures markets, the spreads are tiny by comparison, fractions of a percent even for the smallest contract which I think is twenty-five thousand dollars, last time I looked ages ago. I made a mistake in my post – the Federal Reserve Bank of New York is the entity actually responsible for executing foreign exchange intervention, not the U.S. Treasury. My slip. The treasury consults with the Fed, and publishes rates, but doesn’t execute transactions.

  5. It would be helpful if Caracas Chronicles could report the most current numbers available. I understand that the exchange varies in different areas also.

  6. “Maybe the government really believed their own story about how a single website run by a guy at a HomeDepot in Alabama had magical powers to rearrange the economic decision-making of millions of Venezuelans.”

    I check Aporrea every day and such inane beliefs are actually quite common place in those quarters. Ultimately many are people whose most deeply held beliefs, Utopian Communism, are being demolished by reality, so they must find blame elsewhere to protect the ‘self’ built around such ideological shit.

    Moreover, I many times perceive real provincialism on the part of the leadership. For example the threat of Maduro to go to Lima no matter what was just so outlandish and plain stupid. Or making a tour in Africa to show the greatness Venezuelan electoral system.

  7. Well, the DT web site is still working. They are posting 551,230 bs to 1 USD. How far off is this from “reality”?

    “Maybe the government really believed their own story about how a single website run by a guy at a HomeDepot in Alabama had magical powers to rearrange the economic decision-making of millions of Venezuelans.”

    Maybe. The Aporreans certainly seem to believe this. Except of course, it is run by CIA, not some Home Depo guy. So, my take is that this is a problem for Maduro. He needs to blame all problems on El Imperio. He has been claiming that Dolar Today does in fact “induce” this fake inflation. So, if there is no more Dolar Today to blame, what will his new excuse be?

  8. “There have been many rumors about shady operators buying the site to manipulate it.”
    That’s a good one. Were they ever not shady operators?
    The market maker before DT was Lechuga Verde, it was a hell of a scam offering to sell dollars and never delivering. When it collapsed, DT started and somebody spent a hell of a lot of money to promote it and become the standard, people from the government started talking about DT and blocking it. That, of course, gave it “legitimacy”, a very organized operation from the beginning. Somebody made a lot of money.
    Now we have several operations trying to fill the void, lots of money to be made.

  9. The real site for all parallel transactions in Kleptozuela should be GT: Guiso Today. Problem is the astronomical amounts and fluctuations would be untraceable.

  10. I talked to a guy in Barcelona this morning who told me the rate was about 700,000 bs to the $. DolarToday has it at 641 and change so that’s not too big a discrepancy.

    When DolarToday’s rate seemed to freeze for a couple of months I figured it might have more to do with the lack of cash in the streets than anything else. In bolivares, there’s definitely a two-tiered system at play across the country.

    Buy auyama at 25,000 bs to the kilo for cash, pay 50,000 bs per kilo to the same vendor by transfer. Hard to peg a price on anything these days.

    • Ha – DT moved from 550K to 641K just between my two comments. Maybe they read this post?

      MRubio – is the Barcelona guy buying/selling cash bs at 700000:1 or electronic bs – i.e., are cash bs 350:1 or is electronic transfer 1.4M:1? And are the USDs supplied electronically or cash – and does that also bear on the exchange rate?

      A woman in my office sends her Venny mom money by finding someone on What’s App that will accept her USD electronic transfer to a US bank, and then transfers her mom electronic bs in Venny bank. Something like that – no cash involved in the exchange. She has been using DT as an exchange rate, and was caught a little off guard by the sudden increase.

  11. Years ago I used the rate from the Cucuta newspaper to do my calculations. When DT started to go haywire I tried that again, but now that rate is way out of touch. Maybe some pressure applied there as well?

  12. “MRubio – is the Barcelona guy buying/selling cash bs at 700000:1 or electronic bs – i.e., are cash bs 350:1 or is electronic transfer 1.4M:1? And are the USDs supplied electronically or cash – and does that also bear on the exchange rate?”

    He’s a guy who buys corn in bulk from me from time to time and we normally do the deal in dollars. He’s looking for more product but I don’t really want to sell what I have on hand because there’s not much to eat here in town so we’re trillando and selling what we have bit by bit.

    I asked him about dollars and he said the rate there was 700,000 to 1. The other day my stepdaughter called me and said she’d phoned around and the rate was from 650,000 all the way to 1 million depending on the amount involved.

    None of this is really firm. I suspect every deal done is slightly different depending on the urgency of the buyer or seller.

  13. In Caracas the price of groceries may be much cheaper if you pay with note – bills than if you pay thru debit card or electronic transfer , bills have become very scarce and difficult to get so paying with them affords you a surprisingly big discount ……maybe this has some bearing on the subject !! , the market has become more chaotic with the rise in the speed with which the value of the bs falls ……..much quicker than used to be the case……!!, because the rate changes so rapidly tradesmen have a hard time keeping up with the price changes that they make as the bs falls in value…!! Know of a tradesman who having just completed his pricing shcedules for all the stuff he planned to sell the next date had to review them aftr recieving a call from his normal suppliers that their prices had just gone up 45% !!

  14. We can all see that, regardless of whichever reference site now comes to be the new “standard”, the B’s continues to sink daily and the hunger grows. I would not be surprised if Maduro were to ask his socialist brother Evo to start sending coca leaves for the population to chew on to reduce hunger pangs as is common practice especially in the more rural areas of the Andean countries.

    • Currency substitution. It’s a tribute to merchants that they still accept BF at all. Seems the Colombian peso would be a logical alternative, besides dollars or euros, but how to run it through a bank to pay bills with?

  15. I think a system of tracking increases in prices of non regulated groceries and pegging a hypithetical dollar price to them would be most effective for inflation tracking purposes.

    The thing is, there are pressures other than the inflación of prices at work. Urgency, availability of dollars or bs… Was talking to a house maid yesterday, she was telling me that in her town there now exist what she calls the black dollar, which roughly follows price inflation of domestically available goods and DT, and the… Cant remember the name of it now, aguacate dollar or something, which was the price people actually selling dollars there demandes, and which responded more to scarcity of dollars. One was around 500 and the other more 800-900.

  16. I still see a lot of people using DT as their reference, People selling $’s do it because they really need Bs. to pay their local expenses. People buying $’s prefere using DT as they’ve become used to it and still trust it even if their numbers did not seem to track the market for a whie. Other sites actually buy/sell currency and one ends up paying about 10% commission; which brings the numbers very close to what DT shows.

    Besides DT, I only know of two more sites that offer similar info, and one hasn’t been updated since April 9 when its owner waas arrested. Which other sites are there?

  17. Nice Article, but reality?
    I do not think so, at LEAST in regards to viewers EYEBALLS. Now what they do with that info, is another entirely different subject.

    Alexa (an Amazon Company) if you do not know displays website Statistics. This is NOT manipulated due to IP address tracking.

    The Data as of March shows a Global Rank of 3076 (not bad at all) and a Venezuela Page Rage of 50. Of note last July the Global Rank was 1800? so it is falling out of favor. But dead and not in use? Not yet.

    In March it has 157,000 Daily Vistors and 1,528,000 Monthly UNIQUE Visitors.

    VZ visitor account for 40% of the Traffic, US 20%, Spain 8%, etc.

    Follow or view yourself and any other domain at

    https://www.alexa.com/siteinfo/dolartoday.com
    In Ma

    • You are missing the point, is not about the site getting traffic, is about the price rate they mark being relevant.

      For example i have entered DT several times myself this week to check their price but i didn´t sell at that price, i used another reference. So yes, i technically used the site, but it is not their marker which i go by.

      If DT continues to mark way below the new lines that sellers are setting is going to continue to remain irrelevant, wether or not people actually click on their domain or not

  18. Holy cow, following Dale’s comment I looked up the list of the most popular sites in Vz according to Alexa. You know what is above Facebook? The site for the Carnet de la Patria, the govt handout channel. I see there that the prez just declared the creation of a new bond for “national talent”, can we nominate some of the trolls on this site?

    • Half of the time internet service in Venezuela is down and the average speed of connection is barely above 1Mbps, did you really expect some site like Youtube to be the most popular in the country?

      Besides, many gubmint pages might be “popular” simply because people try to access them about five to ten times more than regular pages because they have to reload and access them over and over again as they are very often down or saturated.

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