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So far this year, Venezuela has paid two billion U$ of the capital of its foreign debt; an 80% of the total amount due for 2004, said Alejandro Dopazo, Public Credit director of the Finance Ministry.

Dopazo pointed out that the country has the payment capability to honor its debts. The government official indicated that “The current oil prices, tax collection, as well as all the refinancing programs carried out by the minister of Finance have been contributing factors in making the country’s foreign debt obligations more moderate and manageable” It is important to point out that payments of the foreign debt capital will be 2.5 billion U$ in 2005, an amount within manageable levels, for which Venezuela has enough payment capacity.

Dopazo explained that the country has not only paid its foreign debt, but also repurchased it in advance; an operation carried out in during the month of June. Such is the case of the six month term notes, due for the end of this month. As for the foreign debt interests payments, due in 2005, the amount to be cancelled will depend on the behavior of the interest rate dynamics in the U.S., “but they are not important amounts”,he commented.

According to Dopazo, the most relevant fact is how much the foreign debt payment cash flows have been reduced in a short term. “In this case, there have been from 2 to 3 billion U$ in debt expiration savings from 2003 to 2008”.These savings are a result of the refinancing program forwarded by the minister of Finance.

The foreign debt is currently 22 billion U$, and Venezuela has always made its due payments, a point in its favor that should be taken into consideration by the risk analysts.

Published in Quantum No 31