The government of Venezuela has little over $10 billion of foreign reserves cash, CNN reports, suggesting it will soon run out of funds completely. The nation’s socialist government has vowed not to default on its debts but has done little to stop the rapidly growing hyperinflation and spread of poverty and hunger.
With $10.5 billion in its coffers, Venezuela is expected to pay $7.2 billion to nations it owes debt payments to, leaving very little in the bank. CNN notes that Venezuela’s foreign reserves have been in rapid decline for years — Venezuela boasted nearly twice the amount of money in 2015 and $30 billion just six years ago. “The trend can’t persist much longer,” CNN warns, “but it’s hard to know exactly when Venezuela will run completely out of cash.”
“There are now individuals in South America that have more money than Venezuela’s central bank,” Kenneth Rapoza observes in Forbes. “Venezuela’s economy is contracted an impressive 18.6% in 2016. If there is a failed state in the America’s, [Venezuelan dictator Nicolás] Maduro is running it.”
Venezuela’s next debt payment is due April 12, according to the Venezuelan newspaper El Nacional. The government must pay $2.1 billion, inching it ever closer to default. According to economist Tamara Herrera, who spoke to a regional outlet, the government has vowed to avoid default because “it would be devastating for the country, but even more for the government.” She nonetheless warns that a “disorderly default” could be on the horizon due to the government’s proven inability to manage the economy.
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