Venezuela’s credit rating was cut by a third international ratings company in three months, as Fitch Ratings said accelerating inflation and weakening growth had fuelled a wave of street protests in the country.
The rating was reduced one level to B, five steps below investment grade, Fitch said in a statement yesterday.
Venezuela is now rated in line with Lebanon, Ecuador and Rwanda, financial news service Bloomberg.com reported.
“Macroeconomic instability has increased in Venezuela, as highlighted by spiralling inflation and recessionary conditions in the economy,” Fitch analyst Erich Arispe wrote in the e-mailed statement. “Heightened social unrest, most notably the ongoing wave of demonstrations, highlights the high degree of political polarisation,” which could destabilise the country further, he said.
The Bloomberg report said eleven years of currency controls have made US dollars in Venezuela increasingly scarce, causing shortages of imported products ranging from diabetes drugs to laundry detergent. The shortages are fuelling the world’s fastest inflation and have triggered a month and a half of protests, with opposition parties and students staging daily marches, Bloomberg stated.
At least 35 people have died in the unrest, according to Venezuelan President Nicolas Maduro.