Latin America
Related: About this forumSantos Says PDVSA Bonds Could Fund Venezuela-Colombia Trade
http://www.bloomberg.com/news/2013-09-16/santos-says-pdvsa-bonds-could-fund-venezuela-colombia-trade.htmlPrint QUEUEQ..Colombia is studying a plan to export about $600 million of goods to Venezuela in exchange for bonds of state oil company Petroleos de Venezuela SA.
President Juan Manuel Santos told a conference of Colombian exporters Sept. 13 that he discussed the idea with Venezuelan President Nicolas Maduro.
Theres an initial demand for specific products with a value of about $600 million, Santos said. Were discussing the means of payment. The method we found, and that we are discussing at the moment, is payment with bonds of PDVSA, bonds that have secondary markets.
Shortages of goods in Venezuela ranging from sugar to beef are stoking the worlds highest inflation after Iran as importers struggle to obtain foreign currency. The annual inflation rate accelerated 45.4 percent last month from 42.6 percent in July, the central bank said on Sept. 10, while the countrys scarcity index, which measures the amount of goods not in stock on store shelves, reached 20 percent.
COLGATE4
(14,732 posts)are only as good as the government's intention to honor them.
Bacchus4.0
(6,837 posts)but what is a Colombian merchant going to do with the bonds.
COLGATE4
(14,732 posts)Bacchus4.0
(6,837 posts)so needs to give Colombia something in lieu of cash. Colombian government might want to purchase the products from their own producers and then hold the bonds themselves as payment. Other than stimulating their own domestic production, I am not sure this is a great deal for Colombia
COLGATE4
(14,732 posts)right now trying to beg, borrow or steal $$$. They're plain and simple starting to run out of cash now that the petroleum cash cow of so many decades is withering away under mismangement and outright theft. I don't know if Santos is so interested in Maduro that the Colombian State would take these bonds - doesn't sound like a great idea to me but maybe for stimulating Colombian exports...
Bacchus4.0
(6,837 posts)but not so much if Ven can't pay.