Saturday, February 20, 2016


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:

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