Fitch upgrades Venezuela

Fitch Ratings said it upgraded the Bolivarian Republic of Venezuela's long-term foreign currency rating to B+ from B- and long-term local currency rating to B+ from B-. The country ceiling is also raised to B+ from B-.

The outlooks are stable. The short-term rating remains at B.

Fitch said Venezuela's creditworthiness has improved following the resolution of uncertainty related to the August presidential recall referendum and on higher international liquidity. International reserves now stand at $21.3 billion, well in excess of next year's estimated $5.4 billion in interest and principal obligations on the central government's external debt.

Longer term, credit risk remains quite high because of the volatility in government revenues, half of which are directly related to oil. The structural fiscal balance has clearly deteriorated this year: rapid increases in public revenues, most of them either directly or indirectly oil-related, have been matched by similar boosts in spending, preventing the government from erasing its deficit during this bonanza year. Last year's central government deficit was 5.2% of GDP, and Fitch estimates that this year's figure will be between 3% and 6% of GDP.

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