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Caribbean-Latin America | ||
Barclays: 15% devaluation in Venezuela next year | ||
2010-11-21 | ||
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.
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. Expropriation measures, controls and legal uncertainty are the main factors hindering economic growth in Venezuela, said Rafael Alfonzo, the head of the Center for Dissemination of Economic Knowledge (Cedice-Libertad). "A Castro-communist system is being established. It seeks to eliminate the private enterprise. With the elimination of the private sector, economic growth is not likely to occur." | ||
Posted by:Steve White |
#1 I'm surprised they still have 15% to devalue. |
Posted by: Barbara Skolaut 2010-11-21 15:05 |