After reading about all the Chavez rants, then the government seizing both a Hilton in Caracas, then one on the island of Margarita (which basically happened because the Hilton management some how pissed of Chavez), I got intrigued and wanted to experience this wave of crazy government first hand.... so I planned a trip to Caracas and Margarita Island.

Now, I went with my signifcant other so I don't have any mongering details to share or a trip report that is of interest to any of you, but I wanted to at least share one experience I had regarding the currency exchange.

Before traveling, I read up about the official and "parallel" currency exchange rate. I also read that recently the government closed down a bunch of currency exchanges and almost doubled the value of the Bsf to drive down the black market exchange.

I was worried that it would be hard to find places to exchange to the parallel currency exchange rates (which is in the 7-8 to $1 USD range, versus 4.3 for the official rate)....but it was not!

Obviously use of the black market exchange can cut the cost of the trip quite significantly, and actually makes Venezuela a cheap place to visit.

Now, why are dollars specifically in such great demand? Again, in his great wisdom, Chavez fixed the currency to 4.3 instead of letting it freely float in the currency market (there is actually a 3rd rate as well, somewhere in the 2 to 1 range for essentials). But this is not the true value of the currency, plus the local currency is not accepted for payments for much needed imports. Rather, the true value of buying a dollar is reflected at the parallel currency exchange rate.

Now, what did I learn - First and most importantly if you are planning on traveling to Margarita Island, initiate currency exchange in Caracas, even at the Caracas airport and NOT in Margarita Island. It is much more difficult to find these parallel market handlers in Margarita Island then at the Caracas airport.

Additionally, the rate (if you do find one) is much lower, in the 5-5.5Bsf to $1USD range. At the Caracas airport - in the domestic terminal - you should be able to find someone relatively easy (they will most likely approach you) to facilitate this exchange.... just hold out for the highest offer (some will offer you 5, others 6, others 7). A 7 to 1 range should be easily found. Important to note, this parallel market obviously is not approved by the government, so an official currency exchange booth cannot be used.

My exchange took place first in some store in the domestic terminal....then, it moved to the restaurant (the guy working for the store wanted more $$'s and did his own little dealing on the side, so I got an even better rate).

They loved the new and crisp USD$100 or $50 bills.

One important consideration when changing money - Once USD is changed in Bsf it CANNOT be changed back to Dollars. The parallel rate changes daily - there used to be websites that posted the current rate - but those are now being blocked by the Venezuelan government. A fair and realistic expecation to keep in mind (at least as of September 2010) is 6.5-7 to $1.00USD

While I can't exactly recommend Venezuela as a vacation destination, if you do decide to go I hope this helps someone.

Oh, and 'No'- I did not have any problems with false money.