ARACAS, April 7 (Reuters) - Venezuela's central bank has
reached a deal that will provide the country with at least $300
million from New York-based investment fund Fintech Advisory Inc
to help offset a cash crunch, two market sources and a source
close to the government told Reuters on Friday.
The crisis-hit country has spent months negotiating with
investment banks, offering bonds as a guarantee, as it seeks to
boost liquidity ahead of steep debt payments that begin next
week, Reuters reported in February.
Venezuela's oil-dependent economy is suffering a brutal
recession that has millions of people skipping meals amid steep
inflation and low salaries.
Opposition lawmaker Rafael Guzman on Monday said the central
bank was negotiating with Fintech, run by financier David
Martinez, to obtain cash, using bonds issued by state oil
company PDVSA as guarantee.
Martinez is known for reaping big profits from bets on
distressed assets in countries including Argentina and his
native Mexico.
"The operation has been approved," said a source close to
the government who had access to the deal's details and asked to
remain anonymous because he was not allowed to speak about it
publicly.
The central bank agreed to a repurchase deal, known as a
"repo," using around $1.3 billion in bonds held by the
institution, the source added.
The central bank's board has already approved the operation,
according to two other sources in the finance sector.
Neither the central bank or Fintech Advisory responded to a
request for comment, but central bank foreign reserves jumped
$300 million in the aftermath of the deal, the bank's website
showed late on Friday afternoon.
As PDVSA bonds are trading for up to less than half their
worth amid some market fears of a default down the road, the
central bank decided to seek private financing deals instead of
bond sales.
"This is the most viable and legal option they could take at
the moment," a Caracas-based trader said.