September 24, 2004
Analyst: Intervention unlikely
(Business News Americas) - "Concerns over political unrest in Venezuela have diminished (…) Fitch ratings analyst Carlos Fiorillo told BNamericas. 'There's currently a low level of government intermediation in the Venezuela banking sector, which may change, but as banks are the principle buyer of government debt, intervention that restricts the financial system are unlikely,' Fiorillo added.

Following Fitch's recent upgrade of Venezuela's long term currency rating to B+ from B-, the ratings agency decided to upgrade its ratings on many Venezuelan banks. The upgrades stem from an improved operating environment highlighted by low interest rates and a rebound in economic activity.

Venezuela's financial system saw total loans grow by 89.5% to US$8.2bn in August this year, showing a strong demand for financing that has been growing consistently over the last two
years.

'Total lending only accounts for approximately 8.6% of Venezuela's GDP, which is a low figure compared to other Latin American countries and reflects the potential for the financial system to raise intermediation levels,' Fiorillo said.

(…) 'The operating environment in Venezuela is much more favorable for banks now that it was a couple of years ago, and although there are many uncertainties, as long as the economy continues to improve lending should continue to expand,' the analyst concluded".