To determine whether the real exchange rate is misaligned with respect to its long-run equilibrium level is an important issue for policy makers. This note clarifies and calculates the concept of the equilibrium real exchange rate using a structural vector autoregression (VAR) model. By imposing long run restrictions on a VAR model for Venezuela, four structural shocks are identified: Nominal demand, real demand, supply and oil price shocks. The identified shocks and their impulse responses are consistent with an open economy model of economic fluctuations, and highlight the exchange rate as a transmission mechanism in a large oil producing country.