Photo: BBC retrieved
Nobody wants bolivars because they’re pretty much worthless, so you probably know that prices in Venezuela are already set in dollars. What’s a rather new yet common practice in Caracas, however, is the “We don’t accept bolivars, only dollars, in cash or via Zelle.”
Hyperinflation has been hitting Caraqueños’ pockets for over a year and a half now, including suppliers of goods and services. Against that onslaught, most businesses applied different strategies: setting prices in dollars, charging bolivars at a higher than current black market exchange rate, and reducing or eliminating lines of credit.
Though a few accepted dollars, it wasn’t a widespread practice and the option wasn’t publicly displayed (so you’d have to ask). Many Venezuelan virtual stores have been charging in hard currency for a while, and the so-called bodegones—physical stores that keep on popping up in Caracas with imported goods of all sorts—were one of the first stores to publicly announce the possibility of paying in dollars.
As of today, everything can be paid in dollars: from dentist appointments to private school fees, auto parts, car washes, groceries, home cleaning services, mototaxistas and candy.
But when the March national blackout hit, almost no Caraqueño had enough bolivars bills to pay for coffee, let alone lunch or a week’s worth of groceries, so the only option left to pay pretty much anything was dollar bills.
As of today, almost everything can be paid that way, and I mean everything: from dentist appointments to private school fees, auto parts, car washes, groceries, home cleaning services, mototaxistas and candy.
Some bodegones only accept hard currency in cash, and other services are slowly joining the trend. Since pretty much all suppliers take greens via cash or transfer, many are paying bonuses in dollars to their employees (without affecting formal salary packages) and most Caraqueños have dollars at hand—even those of low-income.
A common discussion now is the difference between inflation in bolivars and in dollars: while the first seems to be slowing down, mainly because the current legal banking reserves pretty much dried up the bank credit market, the latter keeps on rising as shortages and uncertainty indirectly promote the demand of services and imported goods. According to Ecoanalítica, between December 2018 and April 2019, a family of four went from spending $110 a month to $720 to cover its basic needs.
Though dollars might help ease payment issues, the problem remains: there’s not enough money in the street, in bolivars or otherwise.
Though dollars might help ease payment issues, the problem remains: there’s not enough money in the street, in bolivars or otherwise. This is why the number one issue industrialists and stores are facing is the drop in consumption.
Everyone wants dollars, sure, but if you’ve been out of Venezuela for a while and return today, you’ll find that now you must have hundreds of dollars for basic needs, and most Venezuelans don’t have access to that kind of cash.
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