Venezuela Plans to Buy Back Debt, Avoid Devaluation
Venezuela will buy back debt as part of a general policy of reducing its debt-servicing payments but, for now, will hold off on announcing details of its plan, the OPEC nation's economy minister said on Tuesday.
"We are going to develop a strategy as the year progresses for taking on debt and buying back debt that will take into account market conditions and we will make any announcements at the appropriate time," Economy Minister Rodrigo Cabezas said.
Although the official exchange rate is fixed, making servicing foreign debt generally more expensive, the government has ruled out any devaluation until at least 2009, the minister added at a news conference.
The official exchange rate is 2,150 bolivars to the dollar. But on a parallel market the greenback costs almost twice as much and this unofficial rate is often used to set prices in the Venezuelan economy.
"In the short term, there will be no devaluation and in budget terms it is not planned for 2008 either," Cabezas said.
Venezuela's debt prices on international markets have generally underperformed other emerging markets' bonds this year. Investors worry over President Hugo Chavez's espoused anti-capitalist policies even though high oil prices enable him to make payments.