Venezuelan Bonds Lose Value, Inflation Remains High Amidst World Financial Crisis

October 10, 2008 ( Venezuelan bonds dropped in value Wednesday. A prominent Venezuelan bond, the Global 27, sunk to 59.5% of its value, lower than it had dropped during the recession caused by the coup against Chávez in April 2002, when the bond sunk to 69.6% of its value.

Amidst a worldwide credit freeze triggered by the collapse of the two largest mortgage firms in the United States last month, the drop in bond values will make it more difficult for Venezuela, the world's fifth largest oil exporter, to obtain loans.

Chávez blamed the current worldwide financial crisis partially on international finance institutions such as the International Monetary Fund (IMF), which released a report on economic prospects of Latin America recently. He said the IMF should "disappear from the world."

One section of the IMF report predicted oil revenues in Venezuela and Ecuador would lighten the impact of the world financial crisis on these countries.

Chávez also announced Wednesday that Russia supports Venezuela's proposal for an international petroleum bank to fund development in petroleum producing countries.

Inflation in Venezuela was 2% in September, slightly higher than in August. The lowest inflation occurred in the prices of transportation, communications, housing services, clothing, and health care, while inflation was the highest in foods and educational services.

This brings total inflation in 2008 to 21.8% nation-wide. The government had originally projected 19.5% inflation for 2008. It later changed the estimate to 27%, as the country completed its 20th quarter of uninterrupted economic growth.