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| Caribbean-Latin America |
| Barclays expects 15 percent devaluation in Venezuela next year |
| 2010-11-20 |
| [El Universal] After some meetings with government and Central Bank of Venezuela (BCV) officials, Barclays prepared a report on Venezuela, according to which by the end of the year, the Venezuelan oil industry will place bonds in order to pay debt with the BCV and feed the Central Bank's securities trading system. The investment bank added that there will be a new devaluation in 2011. In its report, Barclays said that in the first quarter of 2011, and specifically in the first weeks of the year, the government will devalue its currency by 15 percent. Venezuelan authorities are changing their perception about currency adjustments and have said that they cannot repeat the mistakes they made during the 2005-2010 period, when the exchange rate was pegged and the average inflation rate reached 22 percent. They consider that after the devaluation in January, the consumer price index will end at the same levels of 2009. Barclays said that if the government devalues the Venezuelan bolivar, the benchmark rate of the Transaction System for Foreign Currency Denominated Securities (Sitme) operated by the Central Bank will also be adjusted. The British investment firm said that according to the reports provided by the Venezuelan authorities, Pdvsa will offer USD 2.5 billion in bonds to the BCV. Barclays expects Pdvsa to pay USD 1.8-2.0 billion out of a loan of USD 4.8 billion it has with the BCV. To make this payment, PDVSA is expected to make a private placement to the BCV of the new PDVSA 17 with a notional value of about USD 2.5 billion. As regards the oil sector, Barclays expects more FDI in this area (USD 40 billion in the next five years) and a real possibility of increasing oil production by 400,000 bpd by 2013 in what has been called early production and 1.0 million bpd by 2016. |
| Posted by:Fred |