VENEZUELA CURRENCY CRISIS: ANALYSIS OF THE CAUSES

Economic losses caused by currency crisis are spending the fiscal costs of restructuring the financial sector, a fall in economic activity, a distortion in distributable income, a decline in credibilityemphasize the importance of crisis prevention and the use of all available tools that can help in early identification of the financial weaknesses of the crises system. For this reason, some kind of systems could identify the vulnerability indicators or predict a currency crisis in order to take on time true measures to avoid the crisis. The aim of the paper is underling the utilization of theoretical knowledge about currency crises and focusing on analyzing the causes for Venezuela currency crisis. the Evaluation of existing crises can explain the disruptions in the financial system or collapse of the exchange rate. Also, here we determinate the reasons and implications of Venezuela currency crisis, as the crucial role of the foreign exchange reserve for a country in such a circumstances.