The black market knows best

The World

Most get-rich quick maneuvers don't reveal the futility of currency manipulation.

But Cambodia's Phnom Penh Post has revealed an incredibly simple money-making trick made possible by complex government anti-inflation policy.

Here's how it works.

A Vietnamese person catches a bus to neighboring Cambodia, hops out and uses an ATM. He or she withdraws the maximum amount: about $2,000. The ATM spits out U.S. dollars, which are often favored in impoverished Cambodia over the shaky local currency.

This person then locates a currency exchange booth, whips out their fat wallet and converts it all to Vietnamese dong.

The trick has just earned them a sweet $150.

Vietnam's communist government is struggling to reign in inflation of its currency, the dong. The government insists its currency is worth 19,500 to the U.S. dollar.

But this is a fiction. Currency exchange agents outside the country know that one buck is actually worth 21,000 dong. Still, Vietnamese banks are beholden to the official evaluation and that's what customers receive during ATM withdrawals.

The difference between the black market value and the government's value leaves a window open for any Vietnamese person willing to hop a bus to a neighboring country.

Is this legal? The Phnom Penh Post report suggests that it is, though banks are struggling to stop it. The hardest-bit bank, Techcombank, told the paper that the practice has cost them $1.5 million so far.

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