Venezuela

Venezuela could default on its debt as early as the second half of 2013 if President Hugo Chavez wins re-election next month and fails to shore up the oil- producing nation’s “increasingly fragile” balance sheet, Morgan Stanley said, Bloomberg reported. One “tipping point” could be the $4.3 billion in external debt payments that come due between August and November 2013, Morgan Stanley analyst Daniel Volberg wrote in a note to clients today.

OPEC member Venezuela sees no risk of debt default due to the stability of oil prices, an economic official said on Monday, amid some market fears the country faces a looming problem with maturing debt, Reuters reported. Despite growing international risk aversion, Venezuela's state oil company PDVSA and the government have issued $15.2 billion of dollar-denominated bonds so far in 2011 -- by far the largest amount in Latin America. Analysts say the maturing of various papers between 2016-17 could be a problem.

Nearly eight years after Venezuela's President Hugo Chavez was briefly forced from office by a coup attempt, deterioration in Venezuela's infrastructure and economy has continued. City centre shops are now subject to raids by soldiers, checking to make sure prices have not been artificially raised in the wake of this month's currency devaluation. The bolivar's official exchange rate, which is set by government decree, had been held at 2.45 to the US dollar since the last devaluation in March 2005.

Argentina will be forced to default by 2011 unless the government reaches an accord with investors holding $20 billion of bonds kept out of the last restructuring offer, Stone Harbor Investment Partners says. President Cristina Fernandez de Kirchner is negotiating terms of an agreement, which the government needs to regain access to international capital markets that it lost after stopping payments on $95 billion of debt in 2001, Bloomberg reported.

President Hugo Chavez ordered the expropriation of a rice-processing plant in Venezuela owned by American food giant Cargill Inc. on Wednesday because the company allegedly was not distributing rice at prices imposed by the government, the Associated Press reported. The socialist leader also threatened to nationalize Venezuela's largest food producer, Empresas Polar, amid rising tension between his government and privately owned food producers that authorities accuse of sidestepping price controls aimed at stemming high inflation.

Venezuela took control of a local bank owned by Allen Stanford, who faces U.S. fraud charges, the finance minister said on Thursday, as the impact of the American case spread through Latin America, Reuters reported. Finance Minister Ali Rodriguez said the government would seek to quickly sell the bank. In recent days, depositors had worried that the trouble at Stanford International Bank would hurt Stanford Bank Venezuela and had withdrawn cash from the small local bank even though the companies' assets are separate, industry officials and bank customers said.

Rafael Correa, Ecuador's left-wing president, has heightened fears that the Andean nation will default on parts of its $10 billion (£6.8 billion) foreign debt, saying an internal audit due out this week will determine if the debt is "illegitimate," the Financial Times reported today. "If there are sufficient grounds for illegitimacy, we won't pay this debt," he said.