Russia will undertake restructuring of Venezuela's debt
Russia and Venezuela have signed an intergovernmental protocol to restructure Venezuela's debt, as reported on the Russian Ministry of Finance's website.
The new schedule assumes that a debt of $3.15 billion will be repaid within 10 years. The volume of payments will be minimal during the first six years.
The Ministry of Finance explained that the restructuring of the debt "will allow for the allocation of funds for the development of the country's economy, to improve the debtor's solvency, and to increase the chances of all creditors for the return of earlier loans granted to Venezuela."
The Day Prior, the international rating agency Standard & Poor's (S&P) lowered Venezuela's rating on foreign currency liabilities from CC / C level to SD (Selective Default) level. That decision was made after the authorities failed to pay interest on state bonds and bonds of the national oil and gas company PDVSA.
Venezuelan President Nicolas Maduro has said that the country will never default. According to him, the authorities have a clear strategy for refinancing and restructuring the external debt.
The economic situation in Venezuela has become difficult due to a shortage of goods, galloping inflation and a drop in government revenues caused by a decline in oil prices. According to the IMF, inflation in Venezuela will exceed 2300% in 2018.