Fitch lowers Venezuela

Fitch Ratings said it downgraded Venezuela’s long-term foreign- and local-currency issuer default ratings from B to CCC.

The agency also downgraded the ratings on Venezuela’s senior unsecured foreign- and local-currency bonds to CCC from B, country ceiling to CCC from B and short-term foreign-currency issuer default rating to C from B.

The downgrades reflect international oil prices, which have declined sharply in the fourth-quarter of 2014, along with increasing balance of payment pressures in the context of reduced external financing flexibility and rising macroeconomic instability, Fitch said.

Venezuela’s commodity dependence is high, as oil is expected to account for an estimated 92% of current external receipts and 50% of central government revenues in 2014, the agency said.

Low oil prices will erode the main source of foreign-currency for the economy, Fitch added.

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