IMF warns Venezuela over gaps in economic data, transparency
The International Monetary Fund issued a warning to Venezuela on Nov. 3 for failing to provide the institution with economic data on time and gave it six months to address the lack of some statistics.
The decision was not unanimous with Russia objecting to the move and others abstaining, according to two sources familiar with the IMF board discussion.
The sources, speaking on condition of anonymity, said that if the Venezuela did not improve the flow of data, the IMF could issue a “declaration of censure” under Article 8 of the fund’s rules on furnishing of information.
An IMF statement said Venezuela was late on data related to the operations of the social security institute, and total exports and imports of merchandise. The data is used as part of the IMF’s monitoring of economies around the world.
The IMF finding, although unrelated to an announcement on Thursday by Venezuelan President Nicolas Maduro that he wants to restructure the country’s foreign debt, comes as investors worry the government is on the verge of a default.
The country is locked in a bruising economic crisis that has sparked a wave of protests against Maduro’s government amid calls by the international community for political mediation.
Maduro on Nov. 2 vowed to make a $1.1. billion payment on a maturing bond but also created a commission to study the restructuring of payments.
The cash-strapped government invited bondholders to a Nov. 13 meeting in Caracas, although some have indicated they were first waiting to see whether the South American OPEC nation makes the $1.1. billion payment and another due next week.
Venezuela, which was a founding member of the fund in 1946, remains a voting member of the IMF, but it has not had any formal engagement with the international institution for more than a decade. The IMF conducted its last economic review of Venezuela’s economy in 2004.
Meanwhile, Standard & Poor’s on Nov. 3 reduced Venezuela’s long-term foreign currency rating to “CC” from “CCC-” anticipating probable default after President Nicolas Maduro announced restructuring of the nation’s debt.
The decision followed a similar one from fellow ratings agency Fitch, which cut the long-term debt rating to “C” from “CC” based on the announcement as well as “previously missed payments” that “makes a default event highly probable,” the company said in a statement.