China Loosens Debt Terms for Venezuela

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from The Wall Street Journal,

With Default Threatening the Economy as Oil Prices Tumble, Caracas Gets a Lifeline From Its Biggest Creditor.

South America’s most economically troubled country, facing fears of a debt default amid tumbling oil prices and a cash crunch, has been thrown a lifeline by its largest lender, China.

The Asian giant loosened repayment terms on the nearly $50 billion in loans it has granted Venezuela since 2007, according to Venezuela’s Official Gazette. And President Nicolás Maduro said in a speech last week that his finance minister, Rodolfo Marco, would soon travel to China to try to secure new loans.

Mr. Maduro’s popularity has plummeted to 30%, polls show, as Venezuela’s currency collapses and the government struggles with the world’s highest inflation rate and widespread scarcity of basic goods. The country’s woes threaten the future of what Mr. Maduro’s predecessor, the late President Hugo Chávez , called 21st Century Socialism.

Analysts say Beijing’s flexibility may buy Mr. Maduro more time.

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