The Venezuelan government may present conditions for a bond auction before the National Assembly today even as Finance Minister Jorge Giordani said the interest rates investors demand for Venezuelan securities are too high.
Once the conditions have been approved the government could begin to sell bonds at any moment, Giordani said without specifying whether the currency would be in bolivars or dollars.
Venezuela is increasingly looking to China as a creditor as investors demand higher interest rates to guarantee the debt issued by South America’s biggest oil producer, Giordani said.
“This will give additional impulse to the economic growth we’ve already experienced this year -- if you take your foot off the pedal the car stalls,” Giordani said in comments carried on state television yesterday. “We’re not going to pay those rates they make us pay.”
Venezuelan President Hugo Chavez signed a bill to expand the debt ceiling by 45 billion bolivars ($10.5 billion) this year. The government sold $3 billion of bonds due in 2022 with a coupon of 12.75 percent last August.
China and Venezuela set up a joint development fund which has received $32 billion since it was established in 2008. Under the terms of the fund China must double any payment made by Venezuela.
To contact the reporter on this story: Charlie Devereux in Caracas at firstname.lastname@example.org
To contact the editor responsible for this story: Joshua Goodman at email@example.com