Tuesday, May 08, 2007

Chavez pulls out of IMF and World Bank

I do remember hearing something about this before, but this is interesting. Chavez is pulling Vensezuala out of the IMF and the World Bank.

"I want to formalize our exit from the World Bank and the IMF," Chavez said, adding that "We will no longer have to go to Washington, neither to the IMF nor the World Bank, not to anyone."

Chavez, who has often blamed lending policies of these organizations for perpetuating poverty, proposed earlier to establish a Bank of the South, which would be run by Latin American nations and it can help countries facing financial difficulties.

Also, Chavez has pledged to support it with Venezuela's oil revenues.

After Chavez took office in 1999, Venezuela has paid off all its debts to the IMF, and the country recently repaid its debts to the World Bank five years ahead of schedule.

The IMF closed its offices in Venezuela late last year.

For those hoping this backfires on Chavez, don't get your hopes too high. Chavez is a smart operator with a strong following. And, I came across this from Bloomberg:

Venezuela's dollar bonds rose the most in more than a week as concern eased that the South American country may trigger a default by pulling out of the International Monetary Fund.