Venezuela and Argentina have become rather cosy over the past two years. With Argentina unable to access the international capital markets during that time, Venezuela has proved to be a rather fruitful source of funding for Argentina. The Andean nation has invested nearly $3 billion in Argentine sovereign bonds. Venezuela has not invested for purely philanthropic reasons. The purchases have helped boost Venezuelan president Hugo Chávez’s image as a regional leader. Moreover, his government has made healthy returns by selling the debt on to local banks, which have found the bonds handy as a way to convert bolivares into dollars, so circumventing Venezuela’s currency controls.
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