Kenneth Rijock

Kenneth Rijock

Saturday, February 20, 2016

DOUBLE TROUBLE IN VENEZUELAN ECONOMY MEANS INCREASED COUNTRY RISK


Just when you thought the economy in Venezuela could not get any worse, it did. The Government has devalued the national currency, the Bolivar, and, for the first time in decades, raised the subsidized price on gasoline. These moves will further damage international trade, as well as cause Venezolanos to fork out, for the first time, a substantial amount of cash for petrol, each time they fill up the tank.

If you are not already advising clients who look to you for Country Risk assessments to avoid any financial exposure in Venezuela, these two events should convince you to red line the country, for all purposes. The risks of default, or nonpayment of debt, are simply too elevated to justify any investment, extension of credit, or even government contracts. Take a close look at the established unofficial market rate for the Bolivar vs. one US Dollar, which appears at the beginning of this article, should you require further proof.

1 comment:

  1. Very precious updates regarding share market portfolio which gives the correct estimation for trading.

    ReplyDelete

Note: Only a member of this blog may post a comment.