Venezuela wins easier debt terms from Russia and gets a vote of confidence from China, as the oil-rich country says it has starting making interest payments on bonds after a delay that had threatened to trigger a default. David Pollard reports.
Getting groceries in Venezuela is almost as hard as getting debt payments, the cynics might say. Though China, apparently, isn't among them. (SOUNDBITE) (Mandarin) CHINA'S FOREIGN MINISTRY SPOKESMAN GENG SHUANG, SAYING: "We believe that Venezuela's government and people have the ability to properly handle their debt issue. We hope all parties can resolve this issue via consultations." Another ally of Venezuela's socialist government stepped up with support on Wednesday. Russia - according to this announcement - agreeing to restructure three billion dollars in debt over 10 years. Venezuela is now in default, according to S&P, but President Nicolas Maduro's government may now have some room to manoeuvre ... As creditor demands mount .... SOUNDBITE (English) BILL BLAIN, CAPITAL MARKETS STRATEGIST, MINT PARTNERS, SAYING: "Most people in the market describe it as a nightmare ... What is fascinating is the fact that Russia which is owed some eight billion and China which is owed some 20 billion are both facing potentially enormous losses." Those losses might be offset by oil shipments from the OPEC member. Though late interest payments by its state oil company have also spooked markets. Venezuela says it's started paying 200 million dollars in overdue interest - on some of its 60 billion dollars of outstanding bonds. But its political crisis is ongoing, too - amid new sanctions from the US, and the EU. SOUNDBITE (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "Certainly if you look at this from purely human level and you see the suffering of very ordinary innocent people there clearly sanctions are making their plight much worse." For Russia, the plight may be for one of its banks. Traders say exposure to Venezuelan debt could be one reason why shares in VTB - its second largest lender - have slid eight per cent ... To hit their lowest in nearly three years.