Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Bolivar: With Chavez Death, Does this Currency Rebound?

With reports coming out of Venezuela that its president, Hugo Chavez, has died, not only is there some geopolitical instability in the government of Venezuela, but as Chavez has had his thumb on much of the Venezuelan economy, one big question that may be debated  could be in the financial sector. With Chavez instituting various devaluation policies of the Venezuelan currency, the bolivar, over the last decade, what might happen with the currency going forward, and how might some multinational firms be impacted as they deal with Venezuela and use the currency in transactions?

Bloomberg’s Latin America correspondent, Alix Steel, spoke nearly a month ago about the latest devaluation, where Chavez ordered that the bolivar be devalued another 32 percent – which marked the fifth devaluation order in nine years, which has resulted in the bolivar losing 90 percent of its overall value. Steel noted that this move was designed to improve oil exports for the country to help cut down on the government’s budget deficit, and she said part of these various devaluation moves are designed for the treasury to collect an “inflation tax” in the country.

With a devalued bolivar, Venezuela could actually make more money with its exports, Steel says, because it would take more bolivars to buy a barrel of oil from the country than it did before the devaluation. How low does the bolivar go? As of a month ago, it was taking eight bolivars for an American dollar, and the black market for the currency had an exchange rate of 20 bolivars to $1.

With the death of the man who directed all these devaluation policies, could the currency rebound? What could be the impact of this death on the economy in Venezuela and especially on the oil trade with the country? Let us know your thoughts in the comments section below.

DISCLOSURE: I currently own no positions in any oil-related stocks, nor do I own any foreign currency.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!