The experts warned that it was an ill-advised strategy from the outset and now, three years and three months after it was launched, the Casas de Cambio experiment is over. It was, by the pronouncement of the IMF and the IDB, a complete failure.
In April of 2002, then Minister of Finance Ralph Fonseca designed the Cambios as a way to slow the trading of currency on the black market w without forcing traders to go to the commercial banks. The Cambio operators emerged as a middle ground between the formal and informal systems but with license fees, service charges and government taxes added on to the Cambio money, they could not compete with the free reign of the black market.
So, as of Monday, a year after the IMF and IDB strongly advised a then heedless government to shut them down, the Cambios will be officially closed on Monday, July 11th. After that, everyone seeking foreign currency legally will have to go to the commercial banks. Of course, all this does nothing to the black market which continues to thrive and in fact drive the foreign currency exchange market.
