S&P Cuts Vene

S&P has lowered Venezuela’s credit rating to B minus from B, it says, due to a “radicalization” of economic policy. The results of recent municipal elections are likely to reinforce the recent trend toward government intervention, creating more uncertainty regarding the country’s economy. “We expect a continuation of erratic economic policies in Venezuela that, along with pressures on external liquidity and sustained political polarization, will exacerbate the government’s dependence on oil prices and weaken its capacity to manage adverse shocks,” the agency says. Particularly worrying for S&P is new legislation allowing for President Nicolas Maduro to rule by decree. Sustained political polarization and growing economic distortions could “materially increase” the risks for the government debt over the next two years. The outlook is negative.