By David Lawder and Andrea Shalal
WASHINGTON, April 17 (Reuters) – The International Monetary Fund will likely provide Venezuela with a financial support program as part of its re-engagement with the South American oil exporter provided that certain conditions can be met, IMF Managing Director Kristalina Georgieva said on Friday.
Georgieva told a press conference in Washington that Venezuela faces “a very tough road” to restore macroeconomic and financial stability.
The IMF and World Bank announced their re-engagement with Venezuela on Thursday night after no dealings since March 2019 and no full economic assessment since 2004.
“After a seven-year-long pause, we are committed to actively engaging with Venezuela, to do our part to help the country achieve macroeconomic and financial stability, to help the people of Venezuela to see better days,” Georgieva said.
But getting to a loan program will take a lot of effort on the part of both Venezuela and the IMF, she said, adding: “It is not going to be an easy process.”
IMF Western Hemisphere director Nigel Chalk told a separate briefing that an IMF mission team for Venezuela has been formed and is engaging on a virtual basis with the government of acting President Delcy Rodriguez, who assumed power after the U.S. ouster of former president Nicolas Maduro in January.
Georgieva said first on the IMF’s list of priorities to prepare for a Venezuela program is sorting the country’s data adequacy, which she said “falls very short and you can’t make good decisions if you don’t have good data.”
The global crisis lender has reached out to the country’s finance ministry, central bank and statistical agency, Georgieva said.
Adequate data would shed light on a complex web of debt, estimated at over $150 billion that will need restructuring before any loan program can proceed. The IMF’s loan approval process requires a detailed debt analysis to ensure that borrower countries’ debts are sustainable.
Second, the IMF wants to work on capacity-building to strengthen Venezuela’s economic institutions, Georgieva said, adding that authorities are engaging constructively and demonstrating “good faith.”
Georgieva also said the IMF is working closely with the World Bank and the Inter-American Development Bank to provide coordinated support for Venezuela that increases its impact.
News of the IMF’s re-engagement with Venezuela sent prices of Venezuela’s sovereign bonds and those of its state-owned oil company higher on Friday.
Venezuela’s 2027 note rose 2 cents to 53.5 cents on the dollar, the highest price since 2017, while PDVSA’s 2021 note added 2.7 cents to 46.75 cents.
(Reporting by David Lawder and Andrea Shalal; Additional reporting by Rodrigo Campos; Editing by Paul Simao and Andrea Ricci)
