Venezuela Sues U.S. Web Site for Publishing (Real) Exchange Rate

Hugo would be proud.

In true Bolivarian fashion, the Venezuelan government is continuing to wage its valiant struggle against reality with a lawsuit against a U.S.-based news Web site,, which insists on publishing some inconvenient facts -- namely, how much the Venezuelan currency is actually worth — or rather, isn’t.

That is a problem because the black market rate trades at a considerable, ahem, discount from the official exchange rate set by the Venezuelan government. That reflects, among other things, runaway inflation, a dire balance of payments situation aggravated by the fall in the price of oil, a widening deficit with the looming possibility of default, and widespread corruption.

And overall, a general sense of impending economic doom. Shop shelves are bare and consumers wait in lines all day for basic necessities.

As a result, according to the black market exchange rate is over 800 Bolivars to the dollar, compared to an official exchange rate of around six Bolivars to the dollar. (No, that’s not a typo.) The Web site, which makes no bones about its bitter opposition to the government, says the unofficial exchange rate is based on reports from black market traders on the Colombian border.

However, the Venezuelan Central Bank claims that “misrepresents and falsifies Venezuela's national currency rates in an attempt to further destabilize the country's economy,” according to an official statement. Further, the defendants, including an ex-Venezuelan Army colonel living in Alabama, “are also reaping personal financial gain from the currency manipulation espoused by the website.”

Of course, there are a few logical problems with all this.

For one thing, if the unofficial exchange rate published by the Web site is inaccurate, presumably people who actually live in Venezuela and use the currency for transactions every day would know this — and the Web site would swiftly be discredited. Plus, no one is required to consult the site, which doesn’t purport to have any sort of official status; if they choose to give credence to its crazy “fabricated” numbers, that’s their prerogative. There’s also that whole First Amendment thing.

But law firm Squire Patton Boggs, which is representing the Venezuelan Central Bank, is sticking to its guns.

Attorney Adam Fox stated: “Arbitrarily manufacturing currency exchange rates creates further turmoil in a country that is working to overcome the obstacles it already faces in sustaining its economy. In seeking to manipulate global markets by subverting government fiscal policy, DolarToday unlawfully hinders Venezuela's ability to manage its economic affairs.”

Put another way: reality’s a bitch.

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