Venezuela downgraded at S&P to 'B' on greater challenges to economic policy implementation; Outlook Is Negative
Venezuela’s Debt Rating Cut by S&P Amid Post-Chavez Polarization
Venezuela’s credit rating was cut by Standard & Poor’s, which cited concern that division within President Nicolas Maduro’s administration may impair the government’s ability to shore up a sputtering economy.
S&P lowered the rating to B, five levels below investment grade and in line with countries including Ecuador and Cameroon, from B+. The outlook on the rating is negative, S&P said.
Maduro, the handpicked successor of the lateHugo Chavez, who died of cancer in March, is struggling to contain soaring inflation and rising shortages of everything from toilet paper to chicken while economic growth slumps. Annual inflation soared to 35 percent in May, the highest rate since at least 2008.
“Political polarization and internal challenges within the Venezuelan government threaten to weaken the implementation of economic policies at a time of worsening economic conditions with decelerating GDP growth, increasing inflation and growing pressures on external liquidity,” S&P said in a statement.
Yields on the government’s benchmark dollar bonds due 2027 rose 23 basis points, or 0.23 percentage point, to 11.17 percent at 1:50 p.m. in New York.
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