Brazil's black market operates in light of day

The black market in Brazil hardly deserves the name. There's certainly nothing secret about it. When you land at the airport in Rio de Janeiro, two people will try to do a foreign-exchange deal with you before you get to the taxi stand. The first stop is the customs and immigration man. ``He offered to change my money on the spot,'' a surprised British businessman said. ``I did it at a rate of 120.'' That's 120 Brazilian cruzados to the American dollar, pretty close to the official rate that day. He was soon to be disappointed.

``Change 140 to the dollar,'' said the baggage handler, who is more interested in carrying cash than toting luggage. With an official government badge clipped to his breast pocket, he pulls out a bankroll about four inches thick and quickly does a deal. He takes traveler's checks, too.

The baggage handler wasn't that quick. One Canadian broker gave him a Canadian dollar traveler's check, worth 81 cents to the US dollar, and to his surprise received the better US dollar exchange rate. The baggage handler, though, reversed the transaction just as the broker was getting into the back seat of his cab.

Downtown at the hotel, the rate was 148 to the dollar, a jump of 23 percent over the customs man's rate. The reason for all this is the international debt crisis, bizarre Brazilian government policy, and a host of other macroeconomic factors that produce an annual inflation rate of 300 percent. But the only thing every Brazilian, most tourists, and visiting business people know is: Don't get stuck with Brazilian cruzados.

A little over a year ago the government tried to stop the inflation crisis by freezing prices and knocking three zeros off the value of the old currency, the cruzeiro. The switch to the new currency was called Plano Cruzado, after the new paper money.

It worked for a while, but the politicians caved in and got rid of some price controls but not others. Now it's back to the same inflation cycle.

The national pastime for tourists and locals alike is never to take money at its face value. And ``never change money at a bank,'' says a Canadian flight attendant who flies to Brazil twice a month. ``Although at some banks, they'll give you the black market rate if they know you.''