Venezuela missed a crucial payment and finally defaulted on its bonds
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After years of brinksmanship, Venezuela is officially in default, according to credit ratings agency Standard & Poor. The country failed to make an interest payment to international creditors this week.
The cash-strapped Venezuelan government has been fighting to pay foreign creditors on time in order to preserve assets like state oil firm Petróleos de Venezuela, a vital source of cash.
Venezuelan president Nicolás Maduro’s administration continued to pay creditors even as the country has faced dire food and drug shortages.
But now the situation is looking dicey. The foreign reserves that Venezuela can use to pay creditors dropped from $16 billion in 2015 to $5 billion in 2017. Foreign debt is estimated to be at $140 billion.
Venezuela held a meeting with creditors on Nov. 14, but the event lasted only 30 minutes and very little progress was made.