Economics &
Finance
Big Mac index: Venezuelan currency
overvalued by 83%
The Big Mac index computed by The Economist showed that
the Venezuelan Bolívar is the most overvalued currency worldwide with respect
to the US dollar, reflecting the imbalance of the Venezuelan economy.
The Big Mac index is based on the purchasing-power parity
theory that provides that the exchange rate between two currencies is balanced
when the price of a single product is the same in both countries. For such
reference, a Big Mac burger is commonly used. According to the index,
overvaluation of the Venezuelan currency stood at 83% by the end of July. (El Universal, 08-02-2012; http://www.eluniversal.com/economia/120802/big-mac-index-shows-overvalued-venezuelan-currency)
S&P sustains PDVSA's B+ credit
rating
Petróleos de Venezuela received a credit rating of B+
from Standard & Poor's (S&P), which considers that the prospects for
the Venezuelan oil conglomerate will remain stable. S&P explained that the
B+ rating on Pdvsa reflects its opinion that "PDVSA's relationship with
the government will not change significantly over the next few years." (El Universal, 08-01-2012; http://www.eluniversal.com/economia/120801/sampp-affirms-pdvsas-credit-rating)
PDVSA to allocate up to U$D 7
billion a year to repay debt
State-run oil firm Petróleos de Venezuela, S.A. (PDVSA)
will need to earmark between U$D 4 billion and U$D 7 billion a year through
2017 to repay the heavy commitments it has contracted after five years of rapid
indebtedness. This would force the oil holding to refinance its debt amid
sluggish oil prices. The oil firm has resorted to issuing dollar-denominated
bonds to finance current expenditure. PDVSA has also contracted several private
loans in recent years, in the light of skyrocketing fund transfers to the
government and stagnant oil production. (El Universal, 08-01-2012; http://www.eluniversal.com/economia/120801/pdvsa-to-allocate-up-to-usd-7-billion-a-year-to-pay-debt)
Chavez says domestic production to
increase through MERCOSUR
President Hugo Chavez says the country's accession as
full member of the Common Market of the South (MERCOSUR) is an opening for
"a new horizon which will allow
increasing domestic production", and will favor the establishment of
complementary productive chains in the areas of manufacturing, industry,
science and technology. (AVN, 08-02-2012; http://www.avn.info.ve/contenido/chavez-domestic-production-increase-through-mercosur)
Industry says entry into MERCOSUR
requires a change in economic policy
Venezuela´s entry into the Common Market of the South (MERCOSUR) will
force the government to "fully revise
its economic policies", says the Venezuelan Industry Confederation
(CONINDUSTRIA). Businessmen say that policies adopted over the recent years hit
competitiveness, "investment,
development and employment within industry." (El Universal, 08-02-2012; http://www.eluniversal.com/economia/120802/venezuelas-entry-into-mercosur-requires-a-review-of-economic-policy)
Commodities
PDVSA to have oil fields in
Argentina, will develop shale oil
State oil company PDVSA will have oil fields in
Argentinean waters, says President Hugo Chavez. Venezuela and Argentina signed
an agreement for a strategic alliance between state oil companies PDVSA and
YPF, after a meeting between presidents Hugo Chavez and Cristina Fernandez in
Brazil. The agreement will lead PDVSA to develop shale gas and oil gas in
Argentina, which has the largest reserves of shale gas in South America,
approximately 774 TCF billion cubic feet. (AVN, 08-02-2012; http://www.avn.info.ve/contenido/venezuela039s-pdvsa-have-oil-fields-argentina)
Oil and byproducts sales to the US
down 12.8% in May
Oil exports to the United States are on a clear downward
trend. Consolidated data from the US Department of Energy indicate that during
the period from January to May 2012, Venezuelan exports of oil and oil
byproducts to the United States dropped 12.8% compared to the same period last
year. During the first five months of 2012, oil exports averaged 866,000 bpd,
down from 1.01 million barrels in the same period last year. In May, oil exports
to the US totaled 861,000 barrels per day, down 13.8% compared to 999,000
barrels in May 2011, according to the US Energy Department. (El Universal, 08-01-2012; http://www.eluniversal.com/economia/120801/venezuelan-oil-and-byproducts-sales-to-the-us-down-128-in-may)
SIDOR President fired by Chavez
Carlos D'Oliveira, who had been ratified in his position
as President of SIDOR on July 19, has been fired by Chavez due to protests by
some 1600 employees for an outsourcing firm whose relationship with PDVSA was
terminated on July 31. D'Oliveira's discharge took place "over the telephone and without much protocol".
Basic Industries Vice Minister Carlos Faría, the brother of Jesus Faría,
Chairman of the Basic Industries Special Committee at the National Assembly,
has been temporarily been named in his place. More in Spanish: (El Mundo,
08-03-2012, http://www.elmundo.com.ve/noticias/petroleo/industria/presidente-de-sidor-fue-sustituido-debido-a-las-ac.aspx)
International Trade
Chavez agrees to talk to automotive
industry
President Hugo Chavez has ordered the Ministry of
Industry to listen to the proposals by the Venezuelan automotive industry about
the country's entry into the Common Market of the South (MERCOSUR), after the
sector asked to be excluded from the agreement. "We have to listen to them. (Minister of Industry Ricardo) Menéndez,
there should be a meeting with them," said Chávez during a press
conference with local and foreign journalists. (El Universal, 08-02-2012; http://www.eluniversal.com/economia/120802/chavez-agrees-to-engage-in-dialogue-with-car-industry)
Venezuela paid U$D 1 billion in old debt
for Colombian exports
According to Colombian President Juan Manuel Santos,
Venezuela has paid U$D 1 billion in debts with Colombian exporters, and
Colombian exports to Venezuela are likely to rise to U$D 3 billion by the end
of the year. He also said U$D 200 million payments are still pending "as it has not been proven that Venezuela
actually owned such amount of money; we have found fake exports in our records".
(El Universal,
08-02-2012; http://www.eluniversal.com/economia/120801/venezuela-pays-usd-1-billion-in-debt-related-to-colombian-exports)
PDVSA exported 275,000 tons of coke
in July
Petroleos de Venezuela (PDVSA) announced that during July
it has dispatched 275,000 tons of coke to markets in Europe, the Middle East
and South America. More in Spanish: (AVN, 08-03-2012; http://www.avn.info.ve/contenido/pdvsa-despachó-275-mil-toneladas-coque-durante-julio; El Universal, http://www.eluniversal.com/economia/120803/se-elevo-tasa-de-despacho-de-coque-a-traves-del-terminal-de-jose)
Uruguay's President Mujica says
Venezuela's entry into MERCOSUR gives a vigorous impulse to the region
"Venezuela will be our third
trading partner," said Mujica after expressing his wish for Uruguayan
dairy products to secure successful positioning in Venezuela's market. (AVN,
08-02-2012; http://www.avn.info.ve/contenido/mujica-venezuela039s-inclusion-mercosur-gives-vigorous-impulse-region)
Politics
Chávez says that the IACHR Court and
Commission ought to vanish
President Hugo Chavez says that both the Inter-American
Commission on Human Rights (IACHR) and the Inter-American Human Rights Court
should vanish. He says the IACHR Court is "abominable, rotten and disgraceful," and added that both
institutions shall cease to exist as they are not up to the challenges of the
new world. (El Universal,
08-02-2012; http://www.eluniversal.com/nacional-y-politica/120802/chavez-says-that-the-iachr-and-iachr-court-ought-to-vanish)
Legislator charges Chavez brother
tried to "buy" Paraguayan
votes
Jorge Oviedo, President of the Paraguayan Congress, has charged that a
brother of President Chavez offered Paraguayan Senator Zulma Gomez U$D 100,000
to promote Venezuela's entry into MERCOSUR. Senator Gomez made her accusation
in October 2011. President Chavez has charged that a group of Paraguayan
senators were demanding "millions of
dollars" to approve Venezuela's entry into the MERCOSUR Common Market.
More in Spanish: (El Universal, 08-03-2012; http://www.eluniversal.com/nacional-y-politica/120803/senalan-que-chavez-intento-comprar-el-voto-de-paraguay)
