Fitch says ‘default is probable’ for Venezuela, lowers country’s credit rating

CNBC-01Venezuela is more likely to default on its debt because its ability to raise money is being hampered by U.S. sanctions, according to ratings agency Fitch. Fitch said in a statement Thursday that a Venezuela default is “probable given the further reduction in financing options” stemming from the latest round of U.S. sanctions.

The Trump administration took aim at Venezuelan President Nicolas Maduro and his government with an August 25 executive order barring trading in certain Venezuelan bonds. The order aims to bar the Venezuelan government from issuing new debt and equity.

Fitch also lowered Venezuela’s sovereign rating to CC from CCC on Thursday. A CC rating is just two ratings above default. …

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During the last several decades, the United States has invested billions of dollars in trying to help the governments of Latin America and the Caribbean deliver better lives for their citizens. This has meant helping them increase internal security by combating the illicit growing and trafficking in narcotics and the activities of terrorist groups, as well as helping them to shore up their democratic and free market institutions.

Unfortunately, in recent years, continued progress in these areas has been threatened, not least by the elections of radical populist governments in Venezuela, Bolivia, and Ecuador. These governments have instituted retrograde agendas that include the propagation of class warfare, state domination of the economy, assaults on private property, anti-Americanism, support for such international pariahs as Iran, and lackluster support for regional counter-terrorism and counter-narcotics initiatives.

We are a group of concerned policy experts that fear the results of these destructive agendas for individual freedom, prosperity, and the well-being of the peoples of the region. Our goal is to inform American policymakers and American and international public opinion of the dangers of these radical populist regimes to inter-American security.