Venezuela default could spark contagion

Drawing comparisons with Argentina’s default in 2001, BNP Paribas head of emerging markets fixed income L. Bryan Carter said the country was “now quite simply out of money and faces imminent dollar access shortages”. “We know the government is already running domestic arrears, prioritising foreign debt service over payments to government employees and suppliers,” he said. “We also know the situation has become a humanitarian crisis with accumulated product shortages now affecting the mass populace. We are watching the Venezuelan street for potential catalysts." Mr Carter added that the contagion risk posed by a Venezuelan default could be even bigger than Argentina’s, despite the country’s benchmark weight. More…