COTD: Venezuela Oil Production (t/bpd)

COTD_Venezuela

Ergo (among other things), this:

COTD_Venezuela_1

There is some minimum threshold level of reserves most central banks will not cross and will resort to various policies to protect and ration foreign exchange reserves, including devaluation, import restrictions, capital controls, selective default, and a full-blown debt moratorium.

Venezuela has used most of these except the latter.   That may be tested in the next five weeks as the country has $3.5 billion of debt payments coming due, mainly by the state-owned oil company known as PDVSA.

The country has been very crafty finding ways keeping PDVSA from defaulting  by rationing reserves, selective defaults to suppliers and other creditors, and finding foreign sponsors, such as China and Russia.

The next few months may be the breaking point for the country, however, especially after U.S. sanctions really begin to bite.

COTD_Venezuela_3

(COTD:  Chart of the Day)

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