| Submit your comments on this article | |
| Caribbean-Latin America | |
| Beijing confirms USD 20 billion loan to Venezuela | |
| 2010-04-25 | |
| The Chinese government confirmed on Tuesday that it granted two loans worth more than USD 20 billion to the government of President Hugo Chavez and that both countries signed oil and energy agreements. "We hope China and Venezuela to make joint efforts to implement these agreements and take bilateral relations to a higher level," said Chinese Foreign Ministry spokeswoman Jiang Yu, reported Efe. On Saturday April 17, the Chinese government and a corporate delegation signed seven bilateral cooperation agreements with Venezuela, Jiang said, including a "framework agreement on financing" under which the China Development Bank (CDB) will provide a USD 10 billion loan and other credit amounting to 70 billion Yuan (USD 10.25 billion). With the agreements signed on Saturday, China ensures part of Venezuelan oil for its voracious economy, and Venezuela gets huge cash inflow at a time of falling oil prices.
The fund in Yuan will be a pilot program to internationalize the Chinese currency, Chinese experts said. They added that given Venezuela's oil potential, the agreement could consolidate the position of the Chinese currency in the oil sector. And consolidate the position of the Chinese government in Venezuela ... Authorities have given few details about the financing in Yuan. According to analysts, since a part of the loan is denominated in Yuan, Venezuela will only purchase goods from China. Otherwise, the Latin American country will have to use its international reserves to spend US dollars to purchase Yuan. | |
| Posted by:Steve White |
| #5 What is swapped, Shipman? And why Equador? |
| Posted by: trailing wife 2010-04-25 14:39 |
| #4 It's swapped, often thru Equador. |
| Posted by: Shipman 2010-04-25 13:22 |
| #3 guess the Chinese have the ability to crack that sulfurous sludge Hoogo peddles? |
| Posted by: Frank G 2010-04-25 11:33 |
| #2 Half the loan may (or may not) be in yuan. Hugo is need the Yankee Dollah. The Devil Best explains it |
| Posted by: Shipman 2010-04-25 07:01 |
| #1 Not so much a loan as prepayment for oil. Rafael RamÃrez, the Minister of Energy and Petroleum and President of state-run oil company Petróleos de Venezuela (Pdvsa), said that Venezuela would ship 100,000 barrels of oil per day to pay off the loan, which will be disbursed this year. Under this repayment schedule, Pdvsa will eventually dispatch 200,000 barrels per day to pay off the debt with the Chinese financial institution. 100K barrels for 10 years at $20B comes out to $54.80/barrel. A good deal for the Chinese any way you cut it, esp since the Chinese have been betting, with long term contracts, commodity prices will rise. But then, the Chinese have $2 trillion USD burning a hole in their pockets. |
| Posted by: ed 2010-04-25 00:42 |