Last January President Hugo Chávez announced he would continue to buy Argentine debt bonds, and recent press reports in Argentina claim that Venezuela is purchasing another USD 2 billion in Argentine debt.

In 2005-2006, Venezuela bought over USD 3.7 billion in Argentine debt bonds. Up to October 2006, Venezuela sold over USD 3 billion of such notes to local banks, with profits at USD 309 million.

Further, both countries made a joint issuance of the so-called Bond of the South for USD 1 billion.

Argentine government sources told newspaper La Nation that President Néstor Kirchner is looking for fresh money, and therefore Venezuela is expected to buy USD 2 billion in notes. The sources claimed that Chávez has shown interest in buying the Argentine instruments, and stressed that beyond the fact that this a good deal, Chávez is gaining unconditional political support from Kirchner.

The transaction is expected to be refined next February 21st, during a meeting to organize the Bank of the South.