Trump’s cancellation of licenses for foreign oil companies operating in Venezuela is likely to worsen inflation by limiting the availability of U.S. dollars. This move further complicates the economic landscape for President Maduro, as Venezuela relies heavily on oil revenues. Analysts forecast significant repercussions, including increased currency depreciation and heightened inflation rates.

On Wednesday, U.S. President Donald Trump revoked licenses for foreign oil companies to operate within Venezuela, a move expected to exacerbate inflation in the country. Economists predict that this action will limit the availability of U.S. dollars in the Venezuelan exchange market, leading to further depreciation of the bolivar currency and escalating prices. This poses significant challenges for President Nicolás Maduro, who has attempted to manage inflation through austere economic measures.

The cancellation of oil licenses by President Trump is anticipated to diminish foreign currency inflows in Venezuela, consequently enhancing inflationary pressures in the country. The lack of oil revenues, particularly from foreign partnerships, could hinder economic growth and deepen financial instability. Immediate impacts include a decline in bond prices and a significant depreciation of the bolivar, potentially resulting in an inflation rate of 80%.

Original Source: www.marketscreener.com

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