Fitch rates Venezuela bond B-

Fitch Ratings said it has assigned a B- rating to the Bolivarian Republic of Venezuela's 30-year $1 billion issue.

The outlook is stable.

Fitch said Venezuela's sovereign ratings balance comparatively modest public external debt at 29.5% of gross domestic product and strong external liquidity of 156% against substantial political risks and a policy framework inconsistent with the objective of medium-term sustainable growth and lower dependence on petroleum.

In the context of capital controls and an overvalued exchange rate, the current expansionary fiscal and monetary stance will face increasing pressures this year if the government reverts to the domestic debt market while inflation will likely rise. Furthermore, should the relaxation of external controls become disorderly and trigger sizeable capital flight, Venezuela's comfortable external liquidity position could unravel. A rapid decline in crude oil prices would pressure both fiscal and external balances.

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