How Venezuelan Used ‘Scrape’ to Make Six Times Her Salary


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Venezuela’s currency controls are turning trips abroad into profitable junkets.

A 27-year-old trade analyst from Caracas said she earned six times her monthly salary by traveling in April to Lima, where a business swiped her credit card and gave her $1,600 cash, charged at the official exchange rate of 6.3 bolivars per dollar. When the analyst, who requested anonymity because what she did is illegal, returned to Venezuela, she sold the dollars at the street rate of 29-to-1, enough to pocket 25,000 bolivars after paying off her credit card and travel expenses.

With Venezuelan President Nicolas Maduro struggling to bolster Latin America’s biggest oil exporter, the weakening bolivar has also fueled inflation and undermined economic growth as importers struggle to pay for goods.

The dollar shortage has helped the bolivar’s street rate weaken 70 percent in the past year to 31.5 per dollar, according to El Liberal Venezolano, a website that tracks the trade in bolivars on the Venezuela-Colombia border.

The scheme, known as “raspao” or “big scrape,” is booming in Venezuela as a decade of currency limits causes a dollar shortage that is fueling the fastest inflation in the region and a scarcity of staple products including rice and toilet paper. From Miami to Madrid, travelers use the raspao to undermine socialist President Nicolas Maduro’s rules on dollar purchases.

“The raspao business has become more attractive today than ever because the spread between the black-market dollar and the official rate is greater than ever,” said Henkel Garcia, director of Caracas-based research company Econometrica. “The socialist system has created a subsidy that allows you to travel practically for free.”

North Korea

The dollar shortage has helped the bolivar’s street rate weaken 70 percent in the past year to 31.5 per dollar, according to El Liberal Venezolano, a website that tracks the trade in bolivars on the Venezuela-Colombia border. That’s led to a more than 400 percent spread between the two exchange rates, the widest in the world after North Korea’s 6,000 percent, according to Steve H. Hanke, a professor of applied economics at the Johns Hopkins University in Baltimore.

Currency controls like those in Venezuela create distortions in an economy that make it difficult for businesses to calculate costs and profits, said Hanke, who served as an economic adviser from 1995 to 1996 to former Venezuelan President Rafael Caldera.

“It’s like putting static in a radio receiver,” Hanke said in phone interview. “The more multiple exchange rates you have, the greater the static.”

Maduro, who was elected in April following President Hugo Chavez’s death from cancer, has tried to ease the shortage of greenbacks by reactivating a dollar auction system. The central bank sold $215 million by auction July 17, allotting about $31 million to 20,850 Venezuelans with travel plans.

Travel Subsidy

The exchange rate at the auction, which is not disclosed officially, was awarded at 11.7 bolivars per dollar for individuals even though the average bid was as high as 17.5 per dollar, according to a report by Barclays Plc. The auction is another opportunity for Venezuelans to help subsidize travel costs, said Russell Dallen, head bond trader at Caracas Capital Markets in Miami.

Venezuelans getting dollars through the auction, or using their credit cards abroad at the official rate, sign an online oath that they will use the money for legitimate purposes. Travelers must also file an expense report and save receipts for three years in case they are audited.

The results of a second dollar auction, for $180 million, may be announced today.

A Finance Ministry official, who requested anonymity citing government policy, declined to comment on the currency controls and raspao. Eudomar Tovar, president of the state-run currency exchange board known as Cadivi, didn’t respond to a phone call and e-mail seeking comment. The Information Ministry didn’t respond to an e-mail.

Soaring Inflation

With Maduro struggling to bolster Latin America’s biggest oil exporter, the weakening bolivar has fueled inflation and undermined economic growth as importers struggle to pay for goods. Consumer prices climbed 39.6 percent in June from a year earlier, the fastest pace among 103 economies tracked by Bloomberg.

Kimberly-Clark Corp. (KMB) Chief Executive Officer Thomas Falk said the company’s first-quarter performance in Venezuela “was a little weak” in part due to “our ability to get foreign exchange to pay for imported product,” according to a transcript of the company’s April 19 earnings call. The Dallas-based company produces and distributes goods including diapers and paper towels.

According to the central bank, Venezuelan economic growth slowed to 0.7 percent in the first quarter of the year after expanding 5.9 percent in the same period of 2012 as manufacturing ground to a halt for lack of imported raw materials.

Import Shortage

The central bank’s scarcity index was 19.3 percent in June, meaning that one out of about every five consumer staples was out of stock at any given time.

Ecuador has become a popular destination for Venezuelans seeking to profit from their country’s foreign exchange controls because it’s the closest country where the maximum credit card allowance of $2,500 for traveling abroad is permitted, Garcia, the Econometrica director, said. It is also the only country in South America that uses the dollar as official currency.

In Quito’s red light district known as the Mariscal, a man named Ramiro said he worked as an agent putting Venezuelans in touch with business owners prepared to process their credit cards and provide fake receipts. Ramiro, who asked that his last name not be published because what he does is illegal, said he knew of at least four places in Quito where people can do the raspao, and added that commissions for the service have risen to 18 percent from 12 percent over the past year.


While Venezuelan travelers are able to profit from the controls, the government said it’s seeking to stamp out corruption among companies in the import sector. The government in February closed down a currency market used by companies after it said some of the firms were over-invoicing to justify access to more dollars.

“Currency controls are riddled with corruption,” Garcia said.

Maduro’s predecessor, Hugo Chavez, first imposed currency controls in 2003 to stem the flow of capital out of the country as Venezuelans sought to keep their savings in dollars following a nationwide oil strike that caused gross domestic product to contract 27 percent in the first quarter of that year.

Chavez wasn’t the first Venezuelan leader to apply currency controls, though the current measures are the longest lasting, said Cesar Yegres, an economics professor at the Universidad de Oriente in Cumana who has studied the history of currency measures in Venezuela. Restrictions have been imposed by governments at several moments since the 1960s to stem capital flight, though all previous systems allowed for a legal parallel market that acted as an escape valve for pent-up demand, Yegres said.

Multiple Exchange Rates

“Whenever there is an illegal component, the price jumps because it’s riskier,” Yegres said.

President Luis Herrera Campins installed a multiple exchange rate system in 1983 that lasted six years after Venezuela underwent a balance of payments crisis and reserves fell 40 percent to $9 billion.

By the time controls were lifted in 1989, the spread between the official exchange rate and a legal parallel rate was 132 percent, which spurred those with access to the preferential rate to take profit by arbitraging the two rates, said Jose Guerra, former head of research at the central bank.

To help combat the raspao, the government currency board in November 2009 lowered travel dollar allowances to neighboring countries. The maximum allowance to Colombia was lowered to $700 from $5,000. Panama and Caribbean islands such as Curacao had limits lowered to $1,000.

Border Trip

As fast as the government tightens restrictions, Venezuelans find ways around them. A technician from Caracas, who also requested anonymity, said that for the last four years he’s made an annual trip to Cucuta on the Colombian border with Venezuela to carry out the raspao.

Since the government reduced the amount of dollars accessible for travel to Colombia, he paid a friend 2,000 bolivars to issue him a fake airline ticket to Spain. He then travels to Cucuta where a company with a credit card machine registered in Spain carries out the raspao and hands him his cash along with a credit card voucher in euros and a fake receipt for electronic equipment.

159% Profit

On the last occasion, he bought dollars from the government totaling 22,000 bolivars at the official rate and re-sold them at an exchange house in Cucuta for about 57,000 bolivars, a profit of 159 percent.

Even as corruption proliferates, the government has shown little indication that it plans to eradicate controls, said Dallen, the bond trader.

“The farther the real world rate gets from the government rate, it just becomes more difficult to eliminate controls and more lucrative for people willing to do the arbitrage,” Dallen said.

To contact the reporters on this story: Corina Pons in Caracas at; Charlie Devereux in Caracas at

To contact the editor responsible for this story: Philip Sanders at

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