Venezuela Is Down To Its Last $10B As Debt Payments Loom

Tyler Durden's picture

Via Zainab Calcuttawala of OilPrice.com,

Venezuela’s central bank is down to its last $10.5 billion in foreign reserves, according to the institution’s most recent report on the country’s financials.

Over the remainder of 2017, Caracas needs to fund $7.2 billion in debt payments – an amount that it can only meet if oil prices spike far higher than the ongoing boosts caused by OPEC’s output reduction agreement.

Current reserves stand 66 percent lower than levels in 2011, when the government held $30 billion in foreign currencies to spend on loan repayments and other official business (and down 75% from 2008 highs)

"The question is: Where is the floor?" Siobhan Morden, head of Latin America fixed income strategy at Nomura Holdings, told CNN Money. "If oil prices stagnate and foreign reserves reach zero, then the clock is going to start on a default."

Venezuela’s financial report for 2016 stated that roughly $7.7 billion of the remaining $10.5 billion in foreign reserves had been preserved in gold. Last year, in order to fulfill debt obligations, Caracas began shipping gold to Switzerland.

The drastic fall in oil prices in 2014 and widespread corruption have both caused an economic meltdown in the South American country, where citizens had become accustomed to imported goods paid for by fossil fuel revenues.

President Nicolas Maduro has resorted to opening the country’s border with Columbia to allow Venezuelans to purchase necessary medical and day-to-day supplies.

Venezuelan state-run oil company PDVSA’s default is probable, according to the ratings agency Fitch, which cited the oil giant’s weak liquidity position and high amortization scheduled for 2017 as the causes of the default problem last month.

"Should oil prices remain around current levels, average recovery may lead to additional future defaults to further reduce obligations and allow for necessary transfers to the government," said Fitch’s senior director Lucas Aristizabal.

The company has projected that its oil production will maintain its 23-year-low in 2017.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
PoasterToaster's picture
PoasterToaster (not verified) Mar 2, 2017 3:44 PM

What if Venezuela wasn't crushed by the bankers and their "socialist" propaganda campaign? 

Sometimes people just want to be free.

Logan 5's picture
Logan 5 (not verified) PoasterToaster Mar 2, 2017 3:45 PM

The Squid doesn't care about your war or President... It only wants to get it's grubby hands on your gold & resources.

nuubee's picture

I wish I was down to my last $10B, the things I could do in 40 years with $10B....

auricle's picture

The squid will gladly loan you more fiat for more ownership in your real assets. 

E.F. Mutton's picture

Haven't they heard of the cornucopia of economic wonders that come with unchecked Muslim immigration?

Merkel and Maduro, you two need to meet....

The Juggernaut's picture

I look forward to the day the US government gets what they've been giving out to the world and their own citizens.  It will be righteous.

D Nyle's picture

Rex Tillerson was in control when Venezuela screwed Exxon ( when they repatriated their oil). Venezuala will be screwed when looking for help, pretty sure that will be a bargaining point during trade negotiations with other countries by Rex

rf80412's picture

Don't worry, they will get it.  Unfortunately, it won't be from us, but from the people they had previously used as weapons against us.  They believe every damn word of what they've been told even as those who told it to them did so only as cynical manipulation or as a decadent's sick joke.

The only people who have faith in this country are the people who have no reason to have faith in it, because it's screwed them at every turn and made them pay for it.  Meanwhile, the only people who have no faith in this country are the people with every reason to have faith in it, because it's done everything that the richest and most powerful country in the world could do for them.

Déjà view's picture

Angel Falls...3,212 ft. down...long way...

rf80412's picture

Joke's on them ... I don't have any real assets!  Certainly not any assets that aren't also made of paper with no intrinsic value other than demand for them!

Of course, they're not trying to get more ownership of your real assets; they know perfectly well that nobody but them actually owns anything.  Instead, their goal is to divert a bigger share of your expenses into their pockets as debt servicing.  They guess correctly that up to a point, it's very worth it to people to be able to spend more than they make, or at least spread out the spending in time while they get the product right here right now.  "We" don't care if we pay the bank or the credit card company to buy something we need or want on credit versus paying the actual seller in cash.  It's also why they have to keep leveraging new loans off of old ones: the loans are the only assets - guaranteed future cash flow - in the picture.

alangreedspank's picture

They don't. They really are low IQ voters and very few people are tired of what's going on there. That's why it keeps on going...

Philo Beddoe's picture

Give them a free tshirt at election time and that is all you need.  This is how you buy votes in Latin America. 

Go to Mexico and all the poor slobs are wearing some politico's fucking propaganda shirt.  

SeuMadruga's picture

THAT'S A BIG FAT UGLY LIE !!!

We braz-ill-ians, for instance, also demand those fancy embroidered "MAGA"-stylish caps... :-)

deer_flasher's picture

And the worst thing is their vote is the same as ours. Having babies like crazy who then go to poverty directly and become criminals and sicarios... Meanwhile the middle class gets hammered with even more taxes, gets robbed by the political class and the lower/criminal classes.

We call them ''Come lonches'', sandwhich eaters, cause they're too stupid to be called snowflakes

PurpleNIRPle's picture
PurpleNIRPle (not verified) Mar 2, 2017 3:44 PM

THE QUICKENING HAS BEGUN

buzzsaw99's picture

let me see if i have this right. their people are starving but they are going to give their last $10B to the pirate global financiers?

Philo Beddoe's picture

Yep and fly to parts unknown after the deal is done. 

buzzsaw99's picture

some maggot banker has his hand up maduro's ass to the elbow.

samjam7's picture

Those military cronies just want to safe their own sorry skin, they know their time is running out but the longer it takes the more they can steal. Sounds familiar?

techpriest's picture

It's more like, Maduro wants to keep his failed regime going, and will gladly sell his country to anyone to keep him and his in luxury.

Remember the old horror stories kids used to tell each other, about people who sold their soul to the devil. When you think it through, no price is high enough to do such a thing.

rf80412's picture

Doesn't sound very Marxist.

alangreedspank's picture

Soon enough Caracas will be Carcass

sixsigma cygnusatratus's picture

"President Nicolas Maduro has resorted to opening the country’s border with Columbia to allow Venezuelans to purchase necessary medical and day-to-day supplies."

Socialism.  Great, now Venezuela can run out of Colombia's meds.

alexcojones's picture

And all that gold gone too. Sad

BUT, Good News-!!! Billion with a B

Chavez's Socialist Daughter Is Worth $4.2 Billion: Reports | The Daily
hotrod's picture

Think I would default rather than give up my last reserves of gold.  Even personal bankruptcys get to hold on to core assets to run a persons life.  Cant gut the whole country. 

dchang0's picture

Gutting the whole country was the Venezuelan Socialists' plan all along. They were able to hide it behind platitudes and blaming foreign enemies for a long while, but now is when the veneer has worn through.

Maduro has got an exit plan. All he has to do is maintain access to a private airstrip, and he'll be fine.

Giant Meteor's picture

Down to their last 10 billion eh?

Hmmmm thinking, thinking ... got it!

Roll it over in the mega billion lottery sweepstakes and put the rest into the slot machines.

Be back in the black before you can say civil unrest!

 

JTimchenko's picture

You'd think Nancy Pelosi, Bernie Sanders and the rest of the leftist idiots would learn something from Venezuela, where all their wildest dreams of nanny state have been fulfilled. But, if you think that, you'd be wrong...

Giant Meteor's picture

There's this bottomless well see, and in this well is an endless supply of ink.

The end

dchang0's picture

Oh, they learned the lesson, all right. Pelosi, Sanders, et al, see the high-ranking Socialist Party members in Venezuela eating caviar and drinking champagne while the people outside the gates of their private compounds dig through dumpsters.

They've seen that Stalin lived quite well while millions starved to death, and they are determined to make sure they are part of the power elite that stands atop the backs of the commoners. They've seen Marie Antoinette and know they need to ban guns to avoid ending up like her.

John Law Lives's picture

Burn baby burn!  Disco inferno!
Burn baby burn!  Burn that mama down.
Burn baby burn!  Disco inferno!
Burn baby burn!  Burn that mama down.
Burnin'!

https://www.youtube.com/watch?v=A_sY2rjxq6M

CHoward's picture

Declare bankruptcy!  So what!  When you're down, you're down.

techpriest's picture

What happens when you need cash in 6 months because your country is still a basket case?

sister tika's picture

It's a "good bet" that the same people that crushed Venezuela's economy are the same ones that purchased their gold last year (with worthless fiat).

latasurf6's picture

Worry about the US, you don't have enough knoledge just the fake news you seem to be reading Mr. Durdeen!!

http://www.telesurtv.net/english/news/30-Tons-of-Venezuelan-Bolivar-Bill...

actionjacksonbrownie's picture

They shipped all that Gold to Switzerland? And here I thought it went to Germany. And anyways... why can't they print up a few more trillion currency units like every other CB in the fake "money" world???

Oh that's right, they aren't in "the club", so THEIR fake money is worthless.

Stormtrooper's picture

Had to stop in Switzerland to get cast into kilo bars before going to China.

zelator's picture

Four hundred years ago, all their gold was being shipped to Spain.

sinbad2's picture

Destroying Venezuela and stealing its oil, will not save America, it's just malace.

William Dorritt's picture

 

The Socialist control freaks destroyed the richest country in  S America....in record time.

economessed's picture

Let them eat iPads from now on.

libertysghost's picture

It's "Colombia" not "Columbia". 

 

My profile pic is actually a side street I shot in Bogota.  

aliens is here's picture

Good thing they are not close to us like Mexico, last thing we need is refugees from Venezulea.

libertysghost's picture

Funny you should say that, I know one actually.  He had been kidnapped 3 times and sent pictures of his kids while going about their days (various ransom schemes) and they got out...he did something with computers at some company.  Interesting guy but he's still a little "socialist" somehow so that always perplexes me.