Venezuela To Sell US$3 Billion in Bonds
CARACAS, Venezuela: Venezuela will sell US$3 billion (1.9 billion) in government bonds on local markets in bid to boost economic production, slow soaring inflation and strengthen its currency, the Finance Ministry announced Monday.
Most of the dollar-denominated bonds will be available only to Venezuelan companies that produce goods domestically, according to a statement issued by the ministry. These companies need cheap access to dollars to boost production.
Buyers will purchase the bonds using Venezuelan bolivars at the official exchange rate of 2.15 bolivars to the U.S. dollar, which currently sells on the black market for about 3.70 bolivars. The bonds' price will be announced on Tuesday, the ministry said.
Venezuelan President Hugo Chavez restricted access to dollars and fixed the nation's exchange rate in 2003, driving tens of thousands to buy the U.S. currency on the black market, where it reached prices more than double the official rate.
The bonds would give investors access to U.S. dollars at the favorable official exchange rate, opening the way for companies to import raw materials more cheaply as part of a government initiative to increase domestic production.
Despite Chavez's efforts to boost industrial and agricultural activity, oil-exporting Venezuela continues to import most of the finished products, food, clothes and medicine that it consumes.
US$1.5 billion (940 million) of the bonds will be due in 2023 and US$1.5 billion (940 billion) in 2028, the ministry said.
