The government initially said anyone caught changing money illegally would be fined 10 times the amount, but the increasing demand for dollars made the government back off and accept the black market trade.
''It's a real nasty situation,'' said Antonio Herrera, vice president of the Venezuelan American Chamber of Commerce here. ``It's thoroughly a mess.''
Herrera said that the Venezuelan government has so far distributed some $1 billion under exchange controls but that it takes $1.2 billion a month to bankroll the nation's import-dependent economy. The central bank, however, acknowledges there are some $19 billion in reserves, up from $13.9 billion in late January.
The upshot, Herrera said, is that businesses can't afford to pay so much more for goods, so they cut back on production and staff. ''The people who get socked are the ones who are laid off,'' he said.
Consumer prices here have increased about 15 percent but do not reflect retailers' increased costs, analyst José Antonio Gil said. Prices can only go so high in a nation where real salaries dropped 24 percent last year.
The finance ministry has said it is considering levying a tax on foreign-currency trading, in exchange for a relaxation of the controls, but will not lift the controls completely.
''Every day, the flow of dollars is more efficient and at a higher amount,'' Latin American Bank Association President Ignacio Salvatierra was quoted as saying in a government statement last week.
Carlos, the money changer, said that although he has heard of black-market deals in the millions, most of his clients are not business owners in a crunch but rather ordinary Venezuelans desperate to protect their savings.***
Gen. Richard Myers, when asked Tuesday about allegations that Venezuela is permissive with Colombian rebels crossing into its territory, said, "It's not helpful when countries don't fully support the anti-terrorism fight. "And I think there's more to learn with respect to Venezuela, and we're going to have to continue to explore that." Venezuelan Vice President Jose Vicente Rangel called Myers' remarks "irresponsible" and said Myers "believed false information" regarding allegations that President Hugo Chavez has allowed Colombian guerrillas to use Venezuelan territory as a safe haven. ***