Venezuelan Bonds Are Collapsing, FinMin Denies Devaluation Looming

Venezuelan Bonds Are Collapsing, FinMin Denies Devaluation Looming (ZeroHedge, Nov 13, 2014):

While talking heads proclaim – incorrectly – that low oil prices are unequivocally good for the US economy, it is very much not the case for oil producers around the world. Most notably, Venezuela – which ‘needs’ oil prices above $100 to maintain its socialist utopia – and currently ranks at a lowly 100th on the world’s prosperity index, is in grave trouble if this trend continues. Venezuelan bonds plunged to new record lows today as oil prices hit fresh cycle lows, strongly suggesting default or currency devaluation is imminent. However, as is usual (think Mexico) Finance Minister Rodolfo Marco Torres ruled out devaluation even as oil price drop exacerbates country‚Äôs finances. As one analyst noted, “there’s broad understanding that in the absence of any corrective policy measures that these guys are going to be in serious trouble.” It appears they already are. The Maduro government desperately needs a rise in oil prices, but Saudi Arabia has so far rebuffed calls for an emergency meeting as it pursues a strategy of waiting out higher cost competitors. OPEC does not plan on meeting until Nov. 27. That is still an eternity for a country that is beginning to unravel.

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