Venezuela, in a squeeze for hard currency, devalued its currency for foreigners another 44%, following an initial devaluation of 32% by Chavez in February.  The move is seen as a necessity to keep Venezuela from defaulting on sovereign debt when reliance on excessively high levels of public spending has been the tool of Chavez and his successor, Maduro, to maintain their grip on power.  It is the 6th such major devaluation in a decade.
The move is essentially a bookkeeping sleight-of-hand – it allows the Venezuelan central bank to balance its books by “earning” more Bolivars for its oil export sales, at a time when overall sales volume has decreased dramatically.

Like most communist countries, Venezuela finds itself in a trap of low foreign currency reserves, which creates an inability to pay for foreign goods and services, which forces it to place even tighter currency control restrictions on the population – exacerbating the problem. Its chief export income is from the sale of crude oil and petroleum products (95% of export income), and it is dependent on importing even basic necessities such as sugar, toilet paper and refined gasoline.  The devaluation is in a bid to recoup more US dollars for the central bank and ameliorate the hard currency crunch.  Demand for US dollars outstrips legal supply, creating a thriving black market and an actual inflation rate of about 59% annually.
Many US companies rely upon foreign earnings and investment to continue to fuel their bottom line with a slumping domestic economy.  The danger with this strategy is it leaves them vulnerable to the whimsy of foreign nations outside of the sphere of US corporate law and governance.
The recent Venezuelan devaluation effectively wiped out Ford’s profits for their Latin American division.  Additionally, Ford has $700 million Bolivars which has essentially been held hostage by Venezuela – refusing to allow Ford to exchange or repatriate their earnings.  Other foreign multinationals that find themselves in the same position as Ford include Toyota, Mead Johnson, Merck, Colgate-Palmolive, Goodyear Tire & Rubber and Revlon.

Venezuela has also revived its territorial dispute with Guyana over continental shelf oil exploration rights, necessitating the dispatch of a UN envoy who was unsuccessful.
Contemporaneously, Venezuela completed its arms purchase from Russia, with a final tally in excess of $4 bn.  Materiel purchased included Sukhoi Fighter Jets, Combat helicopters, T-72 tanks, BMP-3 Infantry Fighting Vehicles, BTR-80 Armoured Personnel carriers, and light weapons, including the license to domestically produce AK-103 assault rifles.  Such extensive and wide-ranging purchases would necessitate a large footprint of Russian personnel for training, technical, maintenance and warranty support.  The key piece of the deal, however, is the rumored sale of the S-300 missile system, the same system that has been reported as delivered to Syria, and is considered to be roughly comparable to the US Patriot System.  The S-300 batteries were originally parts of a sales package to Iran, but Russia pivoted the delivery to Venezuela.

“This is my last election.  After this election, I have more flexibility ….”