Economy

October 06

Venezuela takes steps to avoid impact of global crisis
The first steps towards austerity will be taken by the Venezuelan government itself, as it is set to cut public expenses. Alí Rodríguez Araque, Venezuela's Minister of Finance, called on people to imitate this behavior in order to minimize the impact of the global financial crisis in the country.

"The economic events can hit us in any way. This is a possibility. As long as we make savings and act with austerity, we will become stronger to endure any problems that may emerge as a result of the foreign crisis," said Rodríguez in TV show José Vicente Hoy, broadcasted by private TV network Televen.

October 07

Business sector warns Venezuela is not immune to financial crisis
Venezuela will not avoid the effects of the United States financial crisis and its impact on global markets, said in a press conference José Manuel González, chairman of the Venezuelan Federation of Chambers of Commerce (Fedecámaras).

"Our country will not be immune to the first global financial crisis and our economy is not safe from the effects of a global recession," said the spokesman of the business association, adding that the crisis "is a global phenomenon still in progress, and whose main consequences are foreseeable". González stressed: "Analysts require some time to see how the financial crisis responds to the recent measures taken by the major economies in the world."

Venezuelan Foreign Minister praises joint bank with Russia
Venezuelan Foreign Minister Nicolás Maduro said on Tuesday 7th that the creation of a joint Russian-Venezuelan bank would ensure the "financial stability" of bilateral relations.

Maduro highlighted that this recently approved project "would contribute to efforts aimed at creating a new international economic architecture built on a strong partnership between Moscow and Caracas."

"One of the greatest issues of our times is the crisis of the Bretton Woods model, a system that has proven inefficient, especially when there is a crisis in the  liberal monetary system."

October 08

Chávez says OPEC is calling for extraordinary meeting
Venezuelan President Hugo Chávez said on Wednesday 8th that the Organization of Petroleum Exporting Countries (OPEC) is holding an extraordinary meeting, at a time when oil prices have dropped sharply amid concerns of global tumbling demand.

"(Venezuelan Minister of Energy and Petroleum) Rafael Ramírez told me Tuesday night that an extraordinary meeting of OPEC would be convened," said Chávez without elaborating at an economic forum.

Chávez suggests IMF to dismantle the financial architecture
Venezuela's President Hugo Chávez reacted Wednesday 8th to the latest developments concerning the US financial crisis and its impact on the rest of the world, blaming the International Monetary Fund (IMF) as one of the main culprits of the collapse.

"They want to wash their hands and say that they are the saviors," said Chavez. "They are accountable to the whole world. They should resign and dismantle immediately the international financial architecture," said the Venezuelan leader during the inauguration of the event "Responses from the South to the Economic Crisis" held at the Venezuelan School of Planning, with the participation of several Venezuelan and foreign economists and government officials.

Experts discuss global economic crisis in Caracas
A group of expert economists from over 20 countries gathered in Caracas at an international seminar to discuss and debate the global economic crisis.

Thirty-four experts attended the International Conference on Political Economy: The South's Response and Power in the Venezuelan School of Planning from October 8 to October 11, state news agency Agencia Bolivariana de Noticias (ABN) reported.

The event was organized jointly by the Miranda International Center and the Ministry of Planning. Topics included the global financial and economic crisis and economic models as well as the dismantling of both neo-liberal policies and the Washington Consensus.

October 09

Caracas stock market off 1.49 percent
The Caracas stock exchange lost 552.60 points and finished on Thursday 1.49 percent weaker than the trade on Wednesday, as the general index stood at 36,469.64 points, AFP reported.

The financial index sagged to 51,827.48 points, or -2.33 percent; and the industrial index sank to 37,047.15 points, or -0.88 percent.

A total of 57 operations were made in the stock market where 132,967 stocks amounting to USD 383,856 were traded.

One stock was up, three down, and seven ended little changed.

OPEC to hold emergency meeting
The Organization of Petroleum Exporting Countries (OPEC) will hold an emergency meeting on November 18 in Vienna to discuss the impact of the global financial crisis on oil markets, sources with the group said on Thursday.

"The Organization is concerned about the deteriorating economic conditions with contagion risks. The subprime mortgage problems that have been observed for a long time have created a shock wave in financial institutions resulting in huge losses, and escalating credit squeeze which has turned into a deep financial crisis. The continuing turmoil in the financial market has spread to many regions and created even more uncertainties for the world economy," stated the OPEC on its website.

Venezuela's bonds tumble at lower levels than during oil strike
Amid the earthquake shaking world financial markets, the value of the Venezuelan bonds has fallen to historic lows, raising the cost of borrowing for the country and affecting the ability of the Ministry of Finance to act in order to contain the rise of the parallel US dollar.

The USD Global 27 bond, the most representative of the basket of Venezuelan papers, has dropped 59.5 percent of its value, the lowest level in six years, including April 11, 2002, when despite the coup d'état the bond ended at 69.6 percent and the crisis triggered by the oil strike, when (January 16, 2003) the prices of the bond fell 60.7 percent.

Chávez blames IMF for global financial crisis
Venezuelan President Hugo Chávez said that the global financial crisis whose epicenter is the United States marks the beginning of a process of "de-escalation" that "will put an end to the evil capitalist model, which has done so much harm to the world."

Chávez added that the world is faced with "a crucial time" as people are learning the magnitude and impact of the crisis. "The financial architecture that viewed the planet as a casino is cracking; what is needed is that the foundations of this harmful capitalist system fall down."

October 10
Fall in debt bonds impacts Venezuelan financial market
Amid the global financial turmoil, the Venezuelan economy is sending warning signals: the price of Venezuelan bonds has fallen to historic lows raising the cost of financing whereas the foreign exchange parallel market is heating up.

The USD Global 27 bond, the most traded bond in the basket of Venezuelan papers, was traded at 80.7 percent of its value on September 26, 2008. At the end of Thursday's session, it dropped to 59.7 percent, a level that shows its high risk perception, according to investors.

Venezuela dismisses collapse of oil prices
Venezuelan Minister of Planning and Development Haiman El Troudi dismissed the possibility that oil prices may plummet any time soon, despite the untoward global financial crisis hitting world markets.

Although he stressed that oil prices could fall in the future, El Troudi claimed that the decline would not jeopardize the country's oil revenues.

In any case, the Planning Minister explained that industrialized nations are likely to be hit by recession during several years. He also said that emerging economies would have lower growth rates due to the world crisis.

Venezuelan oil prices slump USD 10
The price of the Venezuelan oil barrel ended this week at 81.78, following a decline of almost USD 10, compared with last week, when oil prices closed at USD 91.54.

The USD 9.76 shrinking in one week was mirrored on Friday afternoon on the official website of the Ministry of Energy and Petroleum.

"Oil prices continue decreasing mainly caused by the winding up of contracts in the oil future market in view of the fear about the US financial crisis affecting the world oil demand," stated the Ministry.