• Former Caracas mayor said Maduro allies want him to resign
  • International pressure for negotiated settlememt is building

Venezuelan bonds surged to their highest level in 13 months after a politician linked to the government said that President Nicolas Maduro may be negotiating his departure.

The country’s $4 billion of bonds due in 2027 rose 4.1 percent to 47.8 cents per dollar as of 12:11 a.m. in New York Thursday, the highest since May 2015. The $3 billion of bonds due in 2022 rose 3.1 percent to 51.39 cents per dollar, rallying above 50 cents for the first time since December.

Maduro’s allies have told him he should resign to avoid a defeat in a recall referendum, raising the prospect of a negotiated transition, Juan Barreto, a former mayor for the Metropolitan District of Caracas, said in an interview with Union Radio Tuesday. Venezuela’s opposition is trying to force a recall referendum, with supporters forming long queues this week to validate their signatures in person for a previously signed petition. A referendum result this year could force fresh elections. A heavy defeat for Maduro might inflict mortal damage on the Chavismo movement he leads, said Barreto,
who is also a journalist.

“It’s the first crack,” said Siobhan Morden “It’s hard to tell, but it could be a game-changer. It could be the beginning.”

Former Spanish Prime Minister Jose Luis Rodriguez Zapatero is leading an attempt to mediate between government and opposition as the U.S. and the Organization of American States also step up pressure on the government. South America’s largest oil producer, where the economy is expected to shrink for a third year amid triple-digit inflation, has seen a rash of increasingly violent protests over shrinking supplies of basic goods including food from shelves.

Lawmaker Diosdado Cabello, vice president of Maduro’s Venezuelan Socialist Unity Party, on state television on Wednesday called Barreto misinformed.

“Nobody is negotiating the resignation of President Maduro,” Cabello said.

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