This is very common in the developing world. As governments print money and cause high inflation they want to prevent, or at least significantly delay, citizens exchanging it for a more stable option. So, the governments add friction (limits, KYC equivalents or outright bans) and offer exchanges with less friction at a much lower rate.

Check Argentina -- their "blue rate", used by hotels and other cash-based businesses on site, is often twice as favorable as the official rate that you get with plastic.