Venezuela said on Friday it will issue new debt over the next five months to reduce liquidity that has fuelled Latin America's highest inflation and pressured a rapidly depreciating currency.
On Monday, the Opec nation will launch a $1.5 billion bond issue evenly split between local and international paper, Finance Minister Rodrigo Cabezas said at a news conference outlining the government's anti-inflation program.
The government will then sell $1.2 billion in combinations of local and international Venezuelan bonds in weekly auctions of $100 million to $150 million each that could last through the first quarter of 2008, he said.
Earlier, Cabezas had said Venezuela would issue $1.35 billion in the next five months. But later he explained that amount referred only to the international half of the two issues. "These issues will cover the amortisation's of internal and external debt and generate resources for the payment of foreign debt and help extend the maturity profile of the republic's debt portfolio," Cabezas said.
Next week's issue will sell combinations of long-term international debt with medium-term local paper, to be presented on Monday, Cabezas said. The government will then open order books and announces the price on Tuesday and close books on Thursday, he added.
Venezuela's booming economy grew by more than 10 percent last year on soaring oil prices and record government spending. But inflation is the highest on the continent at 17.2 percent in the 12 months to October.
Burgeoning monetary liquidity has pushed the parallel market rate for the bolivar currency toward 7,000 per dollar, more than triple the fixed official rate of 2,150. The government issues bonds to reduce liquidity in a bid to lower pressure on the bolivar in the parallel market.
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