International Trade
Inventories of stores at Margarita island free ports
drop sharply, according to the Director of the Free
Port’s Chamber Hichan Rajab. He reports businesses have seen their inventories
fall to barely 5%, as a result of the lack of dollars for over a year.
(Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44026&idc=3)
Oil &
Energy
Venezuela oil price falls after 8 weeks of gains
Venezuela's weekly oil basket price broke 8 straight
weeks of gains as oil prices began to moderate in some well-supplied markets. According
to figures released by the Ministry of Energy and Petroleum, the average price
of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week
ending May 22 was US$ 56.28, down US$ 0.72 from the previous week's US$ 57.00. (Latin
American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2388852&CategoryId=10717)
The PETROCARIBE 2nd. Technical Symposium is being held
at PDVSA’s headquarters in Caracas, to review
operational issues and cooperation projects between Central America and the
Caribbean countries. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44030&idc=4)
Commodities
China creates international gold fund
China has created an international gold fund that is
expected to reach a total value of US$ 16.4 billion. The project, which is
being overseen by the Shanghai Gold Market and has attracted investment from 60
countries, will make it easier for member states’ central banks to increase
their gold reserves.}The fund will be operated as part of the New Silk Road, an
investment project being promoted by China to bolster its trade and financial
position in Asia. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2388896&CategoryId=13280)
Economy
& Finance
LATINVEST: Venezuela: Running on fumes?
Venezuela’s situation
continues to unravel at increasing speed as the bolivar tumbled 30% over just
the last week, while the country’s international reserves simultaneously hit a
new 12 year low, closing at $17.526 billion. (Latinvest, http://www.scribd.com/doc/266632291/Latinvest-Venezuela-Weekly-26-May-2015)
FOREX operating reserves estimated at low level
Current estimates are that
at the end of May operating international reserves are US$ 1.522 billion, which
is scarcely enough to cover 23% sovereign and PDVSA debt due in the remainder
of 2015, which is US$ 1.615 billion in sovereign bond interest, and US$ 4.865
billion in capital and interest on PDVSA debt. More in Spanish: (El Universal, http://www.eluniversal.com/economia/150526/que-esta-pasando)
Barclays foresees the public sector’s deficit could reach 30 points of the GDP with the current
FOREX system, in its report on Venezuela. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44015&idc=2)
BOFA estimates parallel exchange rate could reach 600
by year end
No financial institution estimated the parallel rate
could go as high as it has during this first semester 2015, but they are
recalculating their estimations. Francisco Rodríguez, of Bank of America
Merrill Lynch, now says: "If there
is no exchange adjustment and the rates of 6.30 and 12 VEB/US$ are maintained,
we could have a parallel rate near 600 VEB/US$ by the end of the year".
More in Spanish: (El Nacional; http://www.el-nacional.com/)
Parallel market soars
An unprecedented jump in the U.S. dollar sold on
Venezuela’s parallel market has jolted the social networks. The greenback, as
reported by the web pages tracking its movement, climbed 25% to Bs.402 for cash
transactions at 5:30 p.m. on Thursday. A figure 63.8 times higher than the
CENCOEX (Venezuela’s foreign exchange authority) rate of Bs.6.30 per dollar,
the lowest in the market; 33.5 times higher than the Bs.12 per dollar of the
SICAD I alternative method; more than Bs.200 per dollar on the free rate of the
so-called Foreign Exchange Marginal System (SIMADI), which closed at Bs.199.77
per dollar on Thursday, and Bs.87 per dollar higher than the opening value of
this week that began on May 18. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2388824&CategoryId=10717)
Businesses quietly switch to dollars
As Venezuelan bolivars fall into a tailspin on the
black market businesses and individuals are turning to dollars even as the
anti-American rhetoric of the socialist administration grows more strident.
It's a shift that's allowing parts of the economy to limp along despite a cash
crunch and the world's highest inflation. But it could put some goods further
out of reach of the working class, whose well-being has been the focal point of
the country's 16-year-old socialist revolution. Analysts say the administration
likely sees a limited dollarization as the only way to prevent multinationals
from leaving the county altogether. The move toward currency substitution
doesn't sit well with hardcore government supporters, many of whom cut their
political teeth listening to Chavez's tirades against the "dictatorship of the dollar." But
outside economists say Maduro would be wise to embrace the dollar outright.
Steve Hanke points to the example of Maduro ally Rafael Correa in Ecuador, who
has railed against the U.S. during his eight years in office but has so far
shown no desire to bring back the old national currency, which the country did
away with in favor of the dollar. (Associated Press, http://news.yahoo.com/businesses-quietly-switch-dollar-socialist-venezuela-040219420.html)
Pro government legislators recommend FOREX unification,
report simplification to reduce distortions
Pro-government legislator Germán Ferrer, who is also
the national coordinator of the National Association of Social Networks and
Organizations (ANROS), has suggested that authorities seek alternatives aimed
at foreign exchange unification because foreign exchange rates distort the
domestic economy. Jesús Faría, a leading legislator within the ruling United
Socialist Party of Venezuela (PSUV), Jesús Faría, member of the National
Assembly's Finance Committee, reported that the government is considering a
simplification of the foreign exchange system and move forward to a more
manageable scheme, including a controlled foreign exchange rate and a floating
exchange rate. He ruled out dollarization of the Venezuelan economy. (El Mundo,
http://www.elmundo.com.ve/noticias/economia/politicas-publicas/gobierno-estudia-esquema-cambiario-de-dos-tasas.aspx#ixzz3bEgg7L4p; El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/economia/150525/deputy-jesus-faria-govt-ponders-forex-simplification;
http://www.eluniversal.com/economia/150525/deputy-recommends-forex-unification-to-reduce-distortions)
Venezuela ranks second globally in terms of
international arbitration suits against it
(38), a result of late Hugo Chávez’ wave of expropriations and nationalizations
decreed between 2007 and 2012. This has generated financial commitment for
around US$ 6.5 billion although experts estimate the total amount for
arbitration rulings could amount to US$ 13 to US$ 20 billion. Out of the 38
cases opened before the International Center for Settlement of Investment
Disputes (ICSID), 20 are still pending decisions (52.63%). (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44016&idc=2)
Credit activity at Venezuelan banks up 89.01%
The net yield (profit) of the Venezuelan financial
system recorded a 71.77% surge in the first four months of 2015 over the same
term last year, according to SOFTLINE CONSULTORES, which put the indicator at
US$ 5.67 billion versus US$ 2.36 billion in January-April 2014. The credit
portfolio increased 89.01% over last year. (El Universal, http://www.eluniversal.com/economia/150523/credit-activity-in-venezuelan-banks-up-8901)
Politics and
International Affairs
Jailed opposition
leaders Daniel Ceballos, Leopoldo López on hunger strike, call for
peaceful demonstration
Jailed opposition leaders Leopoldo López and Daniel
Ceballos have started a hunger strike demanding the release of all political
prisoners and that a date be set for parliamentary elections this year. Patricia
de Ceballos, Mayor of San Cristóbal municipality in Táchira state and wife of
former mayor Daniel Ceballos, says that he had been on hunger strike for more
than 60 hours, and that for that reason he had been taken from Ramo Verde
Prison in Miranda state, to the 26 de Julio Prison, which houses common criminals
in central Guárico state. López made the a call for a peaceful march this Saturday in a video
leaked from his jail cell in the military prison of Ramo Verde this weekend
where he also announced his intention to begin a hunger strike towards the same
two goals. His video was first broadcast by government media and later on
social media. Caracas mayor Jorge Rodríguez, a leader within the ruling PSUV
party, says their intention is to generate violence, while Public Defender
Tareck William Saab denied that López is on a hunger strike and in isolation.
Lara state governor Henri Falcón expressed support for López and Ceballos, but
warned about "not falling for the provocation of violence". Lopez's call
is supported by his party, Voluntad Popular and the COPEO Christian Democrat
party. (El Universal, http://www.eluniversal.com/nacional-y-politica/150525/dissenters-daniel-ceballos-leopoldo-lopez-on-hunger-strike;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44028&idc=1;
and more in Spanish: (El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/150526/defensor-dice-que-lopez-no-esta-en-huelga-de-hambre; http://www.eluniversal.com/nacional-y-politica/150526/difieren-sobre-los-objetivos-que-tendra-la-marcha-de-este-sabado)
MUD vows to enact general amnesty, eliminate Enabling
Law
Jesús Torrealba, Secretary General of the opposition
Democratic Unity Conference, believes the first thing opposition legislators
must do upon winning a majority in the National Assembly is to approve an
amnesty for all those currently persecuted by the regime. He also says they
must repeal the Enabling Law which grants President Nicolás Maduro power to
rule by decree. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150525/mud-al-ganar-la-an-hay-que-acabar-con-habilitante)
Venezuela has asked EXXON to withdraw from the waters
off Guyana where it has been exploring for oil
as they are part of the disputed area, according to Foreign Affairs Minister
Delcy Rodríguez. She claims Venezuela is ratifying its rights over the
territorial dispute it has with Guyana. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44018&idc=4; El Universal,
http://www.eluniversal.com/nacional-y-politica/150525/venezuela-asks-exxon-mobil-to-stop-oil-prospecting-at-the-essequibo)
India and Venezuela review bi-lateral agenda, announce
presidential visits
The Foreign Ministers of India and Venezuela have met
in Caracas to review their bi-lateral agenda and announce presidential visits
for the coming months. “We have reviewed
the bi-lateral agenda, with big expectations of co-operation in the areas of
energy, agriculture, pharmaceuticals, technology, and the automotive industry.
It’s a full agenda for both countries to take to a strategic level,” said
Venezuelan Foreign Minister Delcy Rodriguez. She also spoke of an exchange of
visits by the presidents of both countries in the near future. (Latin American
Herald Tribune, http://www.laht.com/article.asp?ArticleId=2388911&CategoryId=10717)
Venezuela will have an embassy in “Palestine,” following instructions from Nicolás Maduro, according
to Foreign Affairs Minister Delcy Rodríguez. Palestinian Foreign Affairs
Minister Riad Malki, who recently visited Venezuela, then said “Venezuela is Palestine’s most important
ally. It is the country that gives without asking for anything in return.”
(Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44017&idc=1)
