On Friday, April 10, the Venezuelan government announced plans to reduce the amount of foreign currency it allows the public to buy for the purpose of travel and online shopping.
The government began restricting access to foreign currency 12 years ago, and established distinct quotas for travelers: one for cash, another for credit card expenses abroad, and a third for purchases on the internet. Venezuelans must go through the National Center for Foreign Trade (CENCOEX) to buy US dollars at one of the official rates, sold at a fraction of the black-market rate of around 260 Bs.
No More Cash for Adults
Cash allowances will now be restricted to minors, forcing adult travelers to use their credit cards issued by state-run banks to access low-cost dollars.
The government has also reduced the maximum annual allowance of dollars to travel abroad from $3,000 to $2,500, and Venezuelans will only be allowed to purchase the foreign currency from state institutions.
The latest restriction will mean Venezuelans looking to travel with low-cost dollars will be forced to open an account with a state bank. Travelers will then need to wait six months for the bank to process their credit card application, and an additional six months for CENCOEX to process the request for dollars.
Those with accounts in private banks have a 30-day grace period before all request must go through a state institution. According to the Official Gazette, individuals looking to switch from a private to public bank will not be required to wait the six months if they open the account before the end of the year.
Cash quotas have also been reduced depending on the travel destination. Travelers heading to the United States, for example, will be limited to $700, down from $2,500.
For Canada, Chile, El Salvador, Guatemala, Honduras, and countries belonging to the Bolivarian Alliance (ALBA) and Mercosur, the cash limit dropped from $1,000 to $700 for a one to three-day trip, $2,000 to $1,000 for a four to seven-day trip, and from $2,500 to $1,063 and $1,500 for trips of eight days or more.
For Caribbean nations, Cencoex will only grant travelers $300 for trips of up to three days, instead of the previous $500; allowances for trips of between four and seven days go from $700 to $500, and trips of eight days or more go from $1,000 to $525 or $700.
The cash quota for online shopping remains at $300, but must now be split into three four-month periods over the course of a single year. The result is Venezuelans will now be effectively limited to $100 for each four-month period, and the amount does not carry over if it goes unused.
Asdrubal Oliveros, a Venezuelan economist and head of the consultant firm Ecoanalítica, echoed the widespread criticism from the Venezuelan public following the government’s announcement, and said the cuts reflect a “crisis of great magnitude.”
The hashtag #Cadivazo, referring to CADIVI, the prior name of state agency CENCOEX, became a global trend on Twitter as Venezuelans expressed their discontent.