Venezuelan banks warned not to buy state debt

Venezuelan banks warned not to buy state debt

The head of Venezuela’s parliament has written to the country’s bankers warning them not to take part in state bond auctions and saying any debt they purchase there might not be recognized by a future government.

The head of Venezuela’s parliament has written to the country’s bankers warning them not to take part in state bond auctions and saying any debt they purchase there might not be recognized by a future government. Julio Borges, head of the opposition-controlled National Assembly, said the auctions were “illegal [and] unconstitutional” because the government of President Nicolás Maduro had approved the national budget without parliament’s consent, writes Gideon Long.

“By taking part in these auctions you are … breaking current laws and violating the constitution,” Mr Borges wrote in his letter to the president of the Venezuelan Banking Association. The country’s opposition leaders are trying to isolate the Maduro regime and cut off its funding in the hope of forcing political change. They have previously criticised Goldman Sachs Asset Management and Nomura for buying Venezuelan debt.

Mr Borges’ letter came as the opposition staged a 24-hour national strike to put more pressure on the government. Streets were barricaded and shops were shut in some parts of the country although in other areas local media reported business as usual.

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