Fixed Income Analysis /

Venezuela: Confrontation unexpectedly steps up

  • Maduro conditions the elections to a complete lifting of sanctions

  • Bonds trading should remain confined to current price ranges until new catalysts emerge

  • A recent poll suggests stronger-than-expected electoral headwinds for Chavismo

Ramiro Blazquez
Ramiro Blazquez

Head of Research and Strategy

6 December 2022
Published byBancTrust

Nicolás Maduro adopted again a harsh political stance just days after the resumption of negotiations in Mexico. The Venezuelan President is clearly looking to achieve further sanctions relief, while, at the same time, he reinforces his strategy to divide and weaken the opposition electorate. The hardening of Maduro’s stance caused a severe reply by the mainstream opposition last weekend, creating a confrontational climate that risks stalling the progress seen recently in the negotiation process.

Perhaps not coincidentally, Venezuelan politics heated up after the release of the latest survey on the political situation by a highly recognised pollster. The investigation revealed the stronger-than-expected electoral headwinds that Chavismo could face if the opposition manages to achieve a unitary candidate. Against this backdrop, Maduro is expected to limit political concessions and step up efforts to disperse the opposition vote. In this context, bond prices should remain confined to current ranges until new catalysts emerge. The amnesty and transitional justice discussions –in line with the proposal made by Colombia’s president Gustavo Petro– remain the silver lining for a political solution, in our view.