Venezuela Cut by S&P on Economic Policy, Decline in Reserves

Venezuela’s credit rating was cut by Standard & Poor’s on concern that “erratic” economic policies will boost the government’s dependence on oil revenue and weaken its ability to manage shocks as foreign reserves decline.

S&P lowered the rating one step to B-, six levels below investment grade and in line with Egypt, Jamaica and Pakistan, and gave it a negative outlook. Venezuela’s borrowing costs are the highest in the world among major emerging markets, with its dollar bonds yielding 11.12 percentage points more than Treasuries, according to JPMorgan Chase & Co. indexes.