Latin American Reserve Fund released half-billion dollar loan to Venezuela

Latin American Reserve Fund released loan to Venezuela amounting to 482.5 million USD, which should improve the balance of payments, which crisis forced the government to stop imports of even essential goods. According to fund, the money will contribute to regional economic stability. The members of Latin American Reserve Fund are Bolivia, Colombia, Venezuela, Peru, Ecuador, Uruguay, Paraguay and Costa Rica. The decision on the loan was taken unanimously by finance minister of all the countries.

The loan is too small to solve the Venezuela’s chronic shortage of dollars and fill the widening balance of payments deficit, but is the only option for the country, which had cat all relations with IMF a decade ago. Government debt of Venezuela is the most expensive to insure against non-payment in the world, judging by the levels of CDS. The Venezuela possibility not pay its obligations until June 20, 2017 was 50% compared to 55% a month ago.

In front of the Board of Latin American Reserve Fund, the Central Bank of Venezuela have commented that the Supreme Court has approved the borrowing of funds by the organization. The opposition insisted that the decision must be approved by the Congress, but country is in big crisis and needs immediate action to provide essential goods for the population.

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