VZCZCXRO4882
RR RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHCV #1416/01 1981359
ZNR UUUUU ZZH
R 171359Z JUL 07
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 9268
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEBAAA/DEPT OF ENERGY
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY

UNCLAS SECTION 01 OF 09 CARACAS 001416 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR KLINGENSMITH, NGRANT, AND MMALLOY 
COMMERCE FOR 4431/MAC/WH/MCAMERON 
ENERGY FOR ALOCKWOOD 
NSC FOR DTOMLINSON AND JSHRIER 
HQ SOUTHCOM ALSO FOR POLAD 
 
E.O. 12958: N/A 
TAGS: ECON EFIN VE
SUBJECT: MACROECONOMIC UPDATE JULY 2007 
 
REF: A. CARACAS 667 
 
     ¶B. CARACAS 741 
     ¶C. CARACAS 930 
     ¶D. CARACAS 959 
     ¶E. CARACAS 994 
     ¶F. CARACAS 1031 
     ¶G. CARACAS 1389 
 
THIS MESSAGE IS SENSITIVE, BUT UNCLASSIFIED.  PLEASE TREAT 
ACCORDINGLY. 
 
------- 
CONTENT 
------- 
 
 ¶1.  Overview 
 ¶2.  Economic growth 
 ¶3.  Unemployment 
 ¶4.  International reserves 
 ¶5.  Money supply M2 
 ¶6.  Exchange rates, Central Bank liquidations, and 
     Venezuelan basket average oil prices 
 ¶7.  Consumer price index 
 ¶8.  Balance of payments 
 ¶9.  Merchandise trade balance 
¶10.  Foreign direct investment 
¶11.  Caracas stock exchange index 
¶12.  Central government financial results 
¶13.  Central government debt 
¶14.  Banking system 
¶15.  Interest rates 
¶16.  Internet resources 
 
-------- 
OVERVIEW 
-------- 
 
¶1.  Massive government expenditures, excess liquidity, and a 
consumption boom have led to high economic growth rates for 
the last fourteen consecutive quarters.  These same 
tendencies have contributed to inflation rates nearing 20 
percent a year and inflation shows no sign of declining, 
despite the government's efforts.  As government accounts 
become less transparent and institutions like the Central 
Bank and the National Statistics Institute lose autonomy, 
figures and methods have become untrustworthy.  A weakening 
investment climate has led to capital outflows in recent 
years and the overvalued official exchange rate encourages 
imports and discourages domestic industry.  Debt levels are 
relatively low and the balance of payments and foreign 
exchange reserves will remain manageable unless oil prices or 
production fall.  Government intervention continues to affect 
the financial sector and private sector  institutions are 
under threat. 
 
--------------- 
ECONOMIC GROWTH 
--------------- 
 
¶2. The Venezuelan economy has grown consistently during the 
past fourteen consecutive quarters.  GDP grew 10.3 percent 
(in real terms) in both 2005 and 2006 and has grown 8.8 
percent thus far in 2007.  Non-oil economic activities such 
as finance (26 percent), communications (18 percent), 
commerce (21 percent), transportation (16 percent), and 
construction (27 percent) have grown faster than other 
sectors.  This positive trend has been driven by the huge 
increase in government expenditures made possible by windfall 
oil profits.  On the other hand, the oil sector has 
contracted during the past two years (the Central Bank 
calculates oil sector GDP with constant prices, so changes do 
not reflect changes in the price of oil).  During the first 
quarter of 2007 oil sector GDP decreased by 5.6 percent.  We 
expect the Venezuelan economy to grow between 6-8 percent in 
real terms in 2007. 
 
            REAL GDP GROWTH RATE 
                (PERCENTAGE) 
            -------------------- 
 
 
CARACAS 00001416  002 OF 009 
 
 
                       OIL      NON-OIL     TOTAL 
 
2000                   2.3        4.2        3.7 
2001                  -0.9        4.0        3.4 
2002                 -14.2       -6.0       -8.9 
2003                  -1.9       -7.4       -7.8 
2004                  13.7       16.1       18.3 
2005                   2.6       11.1       10.3 
2006                  -1.9       11.7       10.3 
2007 
I Q                   -5.6       10.6        8.8 
 
SOURCE: Central Bank of Venezuela. 
 
------------ 
UNEMPLOYMENT 
------------ 
 
¶3. According to government statistics, the unemployment rate 
has fallen precipitously in recent years in line with GDP 
growth.  Unemployment figures have been questionable since 
the National Statistics Institute (INE) changed its (still 
unpublished) methodology in 2000.  Similarly, poverty figures 
have been unreliable since methodological changes in 2005 and 
there are concerns that inflation data will be affected by 
plans to change measurements in the third quarter of 2007. 
Since 2005, unemployment has reportedly fallen by more than 
five percentage points, although most attribute this decline 
to reductions in the labor force, rather than increases in 
employment (reftel F).  The informal sector has also been 
decreasing in size, amounting to 44 percent of total 
employees (11.2 million) during May 2007.  INE recently 
announced a new change to its methodology, which will reduce 
the informal sector to around 34 percent of the labor force. 
Government social programs (missions) reduce unemployment 
figures by removing participants from the labor force and 
estimates are that the missions currently "employ" around 
five percent of the labor force. 
 
UNEMPLOYMENT (END OF YEAR) 
-------------------------- 
 
2000                              13.2 
2001                              12.8 
2002                              16.2 
2003                              16.8 
2004                              13.9 
2005                              11.4 
2006                               9.5 
 
2007 
JAN                               11.1 
FEB                               10.9 
MAR                                9.5 
APR                                8.8 
MAY                                8.0 
 
SOURCE:  National Institute of Statistics (INE). 
 
---------------------- 
INTERNATIONAL RESERVES 
---------------------- 
 
¶4. International reserves have decreased by almost USD 12 
billion during 2007 because of the USD 6.8 billion transfer 
of funds from the Central Bank (BCV) to the National 
Development Fund (FONDEN) in February (USD 2 billion), March 
(USD 2.5 billion), and April (USD 2.3 billion) of 2007.  In 
addition, PDVSA's USD 7.5 billion bond issuance in April 2007 
drew down reserves as PDSVA converted the Bolivars earned 
from the sale into dollars (reftel A).  Increases in imports 
have also contributed to this decrease as has the decision to 
maintain PDVSA's dollar earnings in special 
dollar-denominated treasury accounts.  Since its inception in 
2005, FONDEN has received upwards of USD 17 billion in 
transfers from the BCV.  The allocations of these funds and 
their uses are mostly unknown due to the severe lack of 
transparency regarding FONDEN's activities. 
 
     INTERNATIONAL RESERVES (USD MILLIONS) 
 
CARACAS 00001416  003 OF 009 
 
 
    --------------------------------------- 
                      BCV       FIEM        TOTAL 
 
2000 DEC            15,883     4,588       20,471 
2001 DEC            12,296     6,227       18,523 
2002 DEC            12,003     2,857       14,860 
2003 DEC            20,666       700       21,366 
2004 DEC            23,498       710       24,208 
2005 DEC            29,636       732       30,368 
2006 DEC            36,672       768       37,440 
 
2007 
JAN                 35,620       772       36,392 
FEB                 32,569       775       33,344 
MAR                 31,520       779       32,299 
APR                 26,393       782       27,175 
MAY                 24,456       786       25,242 
JUN                 24,346       789       25,135 
 
SOURCE: Central Bank of Venezuela. 
 
--------------- 
MONEY SUPPLY/M2 
--------------- 
 
¶5. Money supply growth during the last four years has 
increased inflationary pressures.  In part to reduce excess 
liquidity, state-owned oil company PDVSA issued bonds worth 
USD 7.5 billion in April 2007 (reftel A).  The issuance 
didn't have the desired effect on liquidity as banks were 
able to fund the purchases by redeeming money held in 
BCV-issued certificates of deposit (reftel B).  As such, 
liquidity was hardly affected.  On July 10, 2007, the BCV's 
board of directors increased minimum interest rates on 
savings accounts from 6.5 percent to 8 percent, and raised 
legal reserve requirements from 15 percent to 17 percent, 
hoping to reduce liquidity.  Most experts do not expect these 
measures to have a significant effect. 
 
    MONEY SUPPLY/M2 (1)       MONETARY BASE 
   --------------------  --------------------- 
 
End of:  (million Bs.) Pct.Chg. (million Bs.) Pct.Chg. 
 
2000      16,284,578     27.8      5,790,841    17.9 
2001      16,976,364      4.2      6,478,295    11.9 
2002      19,573,369     15.3      7,701,120    18.9 
2003      30,835,975     57.5     11,274,439    46.4 
2004      46,363,672     50.4     16,524,461    46.6 
2005      70,795,981     52.7     23,086,512    39.7 
2006     119,892,075     69.3     44,795,446    94.0 
 
2007 (2) 
JAN      117,532,707     -2.0     43,643,278    -2.6 
FEB      118,613,669      0.9     44,101,646     1.1 
MAR      121,255,451      2.2     44,974,362     2.0 
APR      117,507,673     -3.1     42,953,106    -4.5 
MAY      117,875,115      0.3     43,605,464     1.5 
JUN      120,910,402      2.6     45,532,879     4.4 
 
(1) M2 includes currency, demand deposits, savings, and 
certificates of deposit. 
(2) Preliminary figures. 
 
SOURCE: Central Bank of Venezuela. 
 
--------------------------------------------- ---------- 
EXCHANGE RATES, BCV LIQUIDATIONS, AND VENEZUELAN BASKET 
AVERAGE OIL PRICE 
--------------------------------------------- ---------- 
 
¶6. Foreign exchange controls have been in place since 
February 2003, and the current fixed exchange rate of 2,150 
Bolivars per dollar since March 2005.  At the same time, the 
spread between the official rate and that obtained in the 
unregulated parallel market has grown from around 20 percent 
to over 90 percent.   According to the Minister of Finance 
Rodrigo Cabezas, the BRV will not devalue the currency for 
the foreseeable future.  Most economists believe that the BRV 
will have to devalue when oil prices decline, or when 
 
CARACAS 00001416  004 OF 009 
 
 
expenditures exceed revenues such that devaluation becomes 
necessary to maintain the public sector.  Distortions in the 
Venezuelan economy continue to increase, and the longer the 
BRV postpones devaluation, the greater the cost of the 
adjustment will be for the economy.  Daily BCV liquidations 
so far in 2007 are USD 156 million, as of July 6, 2007.  This 
represents an increase of 48.6 percent over the daily average 
in 2006. 
 
     END OF PERIOD EXCHANGE RATES (Bolivars/USD) 
  CENTRAL BANK'S LIQUIDATIONS, AND AVERAGE OIL PRICE 
  --------------------------------------------- ----- 
 
                               DAILY CENTRAL   VENEZUELAN 
       OFFICIAL     PARALLEL    BANK AVERAGE   BASKET OIL 
        MARKET      MARKET        LIQUIDATIONS     PRICE 
                 (1)      (USD million)   (USD/barrel) 
      ----------   ----------  ------------  -------------- 
 
2000      699.75                                25.91 
2001      763.00                                20.21 
2002    1,401.25                                21.95 
2003    1,600.00     2,875.00       17.90       25.76 
2004    1,920.00     2,673.41       58.40       32.88 
2005    2,150.00     2,586.08       78.60       46.03 
2006    2,150.00     3,412.46      105.00       56.45 
 
2007 
JAN     2,150.00     4,293.44      160.00       46.83 
FEB     2,150.00     3,798.27      189.00       50.41 
MAR     2,150.00     3,650.00      124.00       53.03 
APR     2,150.00     3,750.00      117.00       58.38 
MAY     2,150.00     4,100.00      206.00       59.41 
JUN     2,150.00     4,150.00      156.00       62.73 
 
(1) Starting in March 2007, the parallel exchange rate is 
based on the bond swap selling rate.  Before that date, it is 
the rate obtained using CANTV ADRs. 
 
SOURCES:  BCV, CADIVI, Ministry of Energy and Petroleum, and 
Metroeconomica (private consulting firm). 
 
-------------------- 
CONSUMER PRICE INDEX 
-------------------- 
 
¶7. The government's inflation target for the year was 
recently revised from 12 to 14 percent.  However, the current 
yearly inflation rate is almost 20 percent and inflation in 
Venezuela typically increases over the course of the year. 
Price controls in force since 2003, a reduction in the value 
added tax (IVA) from 14 percent to 9 percent, massive 
importation, and increases in reserve requirements have had 
limited effects in reducing inflation.  The oil bonanza and 
associated consumption boom continue to offset anti-inflation 
measures.  There are also shortages of basic food items, 
including milk, meat, beans, sugar, and chicken, as well as 
construction materials, vehicle parts, and medicines (reftel 
E). 
 
 CONSUMER PRICE INDEX (1997 AVG = 100) and CORE INFLATION 
--------------------------------------------- ------------- 
                    CPI             CPI     CORE INFLATION 
               END OF PERIOD     (% change)    (% change) 
 
2000               206.0            13.4          12.8 
2001               231.3            12.3          11.3 
2002               303.5            31.2          31.2 
2003               385.7            27.1          37.9 
2004               459.7            19.2          21.1 
2005               525.7            14.4          14.6 
2006               614.9            17.0          16.3 
 
2007 
JAN                627.2             2.0           1.5 
FEB                635.8             1.4           2.9 
MAR                631.1            (0.7)          1.1 
APR                640.0             1.4           1.2 
MAY                651.1             1.7           1.8 
JUN                662.6             1.8           1.9 
 
CARACAS 00001416  005 OF 009 
 
 
 
SOURCE:  Central Bank of Venezuela. 
 
------------------- 
BALANCE OF PAYMENTS 
------------------- 
 
¶8. The negative capital account balance is expected to reach 
a record high in 2007 and international reserves are 
estimated to fall by as much as USD 10 billion.  The public 
sector increase in foreign assets and the amount of private 
sector capital flight will exceed the expected positive 
current account balance (mainly from oil sales).  The balance 
of payments deficit may already be greater than it appears as 
the official numbers imply oil revenues that far exceed most 
private estimates of Venezuelan production.  If the negative 
overall balance of payment continues, it will become harder 
to maintain the current exchange rate (reftel D). 
 
               BALANCE OF PAYMENTS SUMMARY 
                      (USD BILLION) 
               --------------------------- 
 
                                       JAN-MAR    Forecast 
                       2005   2006   2006  2007(1) 2007 
 
CURRENT ACCOUNT (A)    25.5   27.2    7.0    3.7   13.0 
  EXPORTS, FOB         55.5   65.2   15.5   13.7   56.0 
  IMPORTS, FOB        -23.7  -32.2   -6.2   -9.1   -37.6 
    TRADE BALANCE      31.8   33.0    9.3    4.6   18.4 
  NET SERVICES AND RENT-6.2  - 5.8   -2.3   -0.9   -5.3 
  NET TRANSFERS        -0.1   -0.1   -0.1   -0.1   -0.1 
CAPITAL AND FINANCIAL 
ACCOUNT (B)           -16.8  -19.5   -5.6   -8.3   -22.6 
  DIRECT INVESTMENT     1.4   -2.6   -2.0   -1.1   -2.0 
  PORTFOLIO INVESTMENT -0.8   -7.6   -0.8   -2.5   -5.6 
  OTHER INVESTMENT    -17.5   -9.2   -2.8   -4.7   -15.0 
NET ERRORS AND 
OMISSIONS (C)          -3.2   -3.0   -0.4   -1.0   0.0 
OVERALL BALANCE 
(A) (B) (C)             5.5    4.7    1.0   -5.6   -9.6 
 
(1) Preliminary figures. 
 
SOURCES: Central Bank of Venezuela, and Ecoanalitica 
        (private consulting firm). 
 
------------------------- 
MERCHANDISE TRADE BALANCE 
------------------------- 
 
¶9. The overvaluation of the national currency along with 
liquidity increases has caused huge increases in imports and 
the reduction of non-oil exports.  The United States remains 
Venezuelan's largest trading partner, representing almost 50 
percent of total trade during 2006, followed by Colombia (6.2 
percent), and Mexico (4.9 percent).  Although the BRV is 
trying to diversify its trading partners, historical 
relationships and strong commercial ties make it difficult 
for the BRV to do so. 
 
        MERCHANDISE TRADE BALANCE (USD BILLION) 
        --------------------------------------- 
 
                                    JAN-MAR    Forecast 
                    2005   2006   2006  2007(1)   2007 
 
OIL EXPORTS (A)     48.1   58.4   13.9   12.1     50.0 
 
NON-OIL EXPORTS (B)  7.4    6.8    1.6    1.6      6.0 
 
TOTAL EXPORTS (C)   55.5   65.2   15.5   13.7     56.0 
 
TOTAL IMPORTS (D)  -23.7  -32.2   -6.2   -9.1    -37.6 
 
MERCHANDISE TRADE 
BALANCE (C)-(D)     31.8   33.0    9.3    4.6     18.4 
 
(1) Preliminary figures. 
 
 
CARACAS 00001416  006 OF 009 
 
 
SOURCE: Central Bank of Venezuela, Ecoanalitica, and 
        Embassy estimates. 
 
------------------------- 
FOREIGN DIRECT INVESTMENT 
------------------------- 
 
¶10. Foreign direct investment in Venezuela continues to 
decrease.  The socialist project that the BRV is trying to 
impose, the announced constitutional changes (reftel G), and 
the uncertain political and economic future, have restrained 
investors from making new investments.  On the contrary, some 
foreign companies have decided to sell their assets in 
Venezuela and to move abroad. 
 
               Abroad    In Venezuela   Net flow 
 
2000            -521        4,701        4,180 
2001            -204        3,683        3,479 
2002          -1,026          782         -244 
2003          -1,318        2,040          722 
2004            -619        1,483          864 
2005          -1,183        2,583        1,400 
2006          -2,089         -543       -2,632 
 
2007 (1) 
I quarter       -795         -260       -1,055 
 
(1) Preliminary figures 
 
Source: Central Bank of Venezuela. 
 
---------------------------- 
CARACAS STOCK EXCHANGE INDEX 
---------------------------- 
 
¶11. The Caracas Stock Exchange has been negatively affected 
by the nationalization of the largest telecommunications 
company CANTV and the main electrical utility EDC.  Combined, 
these companies represented around 30 percent of all 
securities traded on the exchange, and often represented over 
50 percent of daily volumes.  Continual harassment of the 
private sector and increased political and economic 
uncertainty, coupled with nationalizations and presidential 
announcements such as the plans to withdraw from the IMF have 
all contributed to the negative behavior of the 
capitalization index.  Venezuelan steel company, Sivensa, now 
represents almost half of the exchange and what was already a 
small capital market continues to shrink. 
 
   CARACAS STOCK EXCHANGE CAPITALIZATION INDEX 
           (DECEMBER 1993 = 1,000) 
   ------------------------------------------- 
 
                   2005        2006        2007 
 
JANUARY          29,303.14   25,119.59   43,965.85 
FEBRUARY         30,388.61   28,299.33   52,533.71 
MARCH            28,977.07   30,882.46   48,945.67 
APRIL            25,089.14   31,194.16   43,363.32 
MAY              22,493.91   30,270.60   39,481.26 
JUNE             21,595.64   30,747.27   40,584.95 
JULY             20,561.79   34,230.54 
AUGUST           19,702.21   35,356.57 
SEPTEMBER        20,769.36   35,392.58 
OCTOBER          19,561.74   38,163.31 
NOVEMBER         19,992.69   43,113.17 
DECEMBER         20,394.83   52,233.68 
 
SOURCES:  Caracas Stock Exchange, and Metroeconomica. 
 
------------------------------------ 
CENTRAL GOVERNMENT FINANCIAL RESULTS 
------------------------------------ 
 
¶12. The BRV has been trying to avoid monetization of 
extraordinary oil revenues through the creation of two 
dollar-denominated accounts at the National Treasury Office. 
The accumulation amounted to over USD 7 billion as of July 
12, 2007.  The diversion of funds from the Central Bank has 
 
CARACAS 00001416  007 OF 009 
 
 
temporarily decreased petroleum revenues and is in part 
responsible for the central government's deficit during the 
first quarter of 2007.  These funds are converted to Bolivars 
at the Central Bank as they are needed by PDVSA to pay 
expenses.  Non-oil revenues represented 57 percent of 
ordinary spending during January-April 2007.  Total central 
government expenditures grew by 9.2 percent in real terms 
during the same period. 
 
           CENTRAL GOVERNMENT FINANCIAL RESULTS 
                     (USD billion) 
           ------------------------------------ 
 
 
                                              JAN-APR 
                           2004  2005  2006  2006 2007(1) 
 
TOTAL REVENUES             36.1  48.3  62.3  16.2 17.7 
 
  Ordinary revenue (A)     24.0  36.2  51.9  14.8 16.4 
    Petroleum revenue      12.8  19.5  29.4  7.6   6.6 
 
    Non-petroleum revenue  11.3  16.7  22.5  7.2   9.8 
  Extraordinary revenue    12.1  12.1  10.4  1.4   1.3 
 
 
TOTAL EXPENDITURES         32.6  41.4  58.5  18.4 20.1 
  Ordinary expenditures (B)27.2  36.4  53.0  15.7 17.2 
  Extraordinary expenditures5.4   5.0   5.5  2.7   2.9 
 
SURPLUS OR DEFICIT (A))(B) -3.2  -0.2  -1.1 -0.9 -0.8 
 
(1) Preliminary figures. 
 
Sources: Central Bank of Venezuela. 
 
----------------------- 
CENTRAL GOVERNMENT DEBT 
----------------------- 
 
¶13. Central government debt levels have been stable during 
the last four years.  Public credit officials at the Ministry 
of Finance told Econoffs that they will continue to 
reschedule debt during 2007, buying back the most expensive 
debt first.  At the same time, state-owned oil company PDVSA 
has been increasing its external debt.  Thus far in 2007, 
PDVSA has issued over USD 12.5 billion in dollar-denominated 
debt, presumably to continue to finance government social 
programs and maintain transfers to FONDEN (reftel C). 
 
          END OF PERIOD CENTRAL GOVERNMENT DEBT 
                    (USD BILLION) 
          ------------------------------------- 
 
                                              Q1 
 
                        2004   2005   2006    2007 (1) 
 
FOREIGN DEBT            27.2   31.1   27.3    26.5 
 
   Bond holders         21.0   25.4   21.5    21.4 
   Commercial banks      2.0    2.0    1.8     1.7 
   Bilateral             0.6    0.5    0.5     0.5 
   Multilateral          3.5    3.1    3.4     2.8 
   Suppliers             0.1    0.1    0.1     0.1 
 
DOMESTIC DEBT           15.5   15.6   16.8    15.9 
                       ------  -----  -----  ------ 
               TOTAL    42.7   46.7   44.1    42.4 
 
(1) Preliminary figures. 
 
SOURCE:  Ministry of Finance. 
 
-------------- 
BANKING SYSTEM 
-------------- 
 
¶15. This is one of the economic sectors that has grown 
fastest during the last four years.  Banks in Venezuela have 
 
CARACAS 00001416  008 OF 009 
 
 
been actively financing the consumption boom.  Loans for 
cars, homes, and credit cards have doubled in less than two 
years.  Financial sector returns exceed 30 percent and 
business is booming.  In part because of perceived "excess 
profits," the government has been threatening the financial 
sector with profit caps and potential nationalization.  To 
date, most of the pressure has been in the form of fixed 
interest rates, directed lending requirements, and tax 
increases. 
 
             BANKING SYSTEM KEY INDICATORS 
                      (percentages) 
             ----------------------------- 
 
                           DEC 05    DEC 06    MAR 07 
Past due loans/ 
gross loans                  1.08      1.06      1.06 
 
Credit portfolio allowance/ 
past due loans             251.34    229.09    210.51 
 
Equity/total assets         11.12      9.81      9.41 
 
Net financial margin/ 
average asset                3.66      2.97      2.40 
 
Net financial margin/ 
average equity              32.49     31.64     29.09 
 
Net loans/ 
total deposits              54.86     48.81     50.72 
 
Source:  SUDEBAN 
 
-------------- 
INTEREST RATES 
-------------- 
 
¶16. On July 10, 2007, the BCV issued a resolution changing 
maximum and minimum interest rates for lending (28 percent) 
and savings (8 percent).  Also, certificates of deposit 
issued by financial institutions now must pay at least 11 
percent interest, and the certificates of deposit issued by 
the BCV will pay 10 percent with a maturity of 28 days, and 
11 percent for those maturing in 56 days.  By reducing 
financial margins, bank profits may fall in the short term. 
 
AVERAGE INTEREST RATES OF THE SIX MOST IMPORTANT 
        COMMERCIAL AND UNIVERSAL BANKS 
--------------------------------------------- --- 
 
                   Loans            Deposits 
                  -------      ------------------- 
                                Savings   90 days 
 
2000               23.91                3.35       14.80 
2001               25.64          2.40     14.13 
2002               37.08          3.90     28.29 
2003               24.05          6.15     17.58 
2004               17.06          4.52     12.93 
2005               15.36          6.64     11.74 
2006               14.64          6.81     10.20 
 
2007 
JAN                15.78          6.58     10.05 
FEB                15.50          6.58     10.13 
MAR                14.94          6.58     14.94 
APR                15.99          6.57     10.11 
MAY                15.94          6.57     10.12 
JUN                14.91          6.57     10.14 
 
SOURCE:  Central Bank of Venezuela. 
 
------------------ 
INTERNET RESOURCES 
------------------ 
 
¶17. INTERNET RESOURCES: 
 
AMEMBASSY CARACAS WEBSITE:  venezuela.usembassy.gov 
 
CARACAS 00001416  009 OF 009 
 
 
- 
EXCHANGE RATES AND INTERNATIONAL RESERVES:  www.bcv.org.ve 
- 
STOCK EXCHANGE:  www.caracasstock.com 
- 
TRADE AND LABOR FORCE STATISTICS:  www.ine.gov.ve 
- 
BUSINESS INFORMATION:  www.venamcham.org 
- 
INVESTMENT OPPORTUNITIES:  www.conapri.org 
- 
PETROLEUM INFORMATION:  www.pdvsa.com, 
www.mep.gov.ve 
- 
PUBLIC FINANCE INFORMATION: www.mf.gov.ve 
- 
FINANCIAL INDICATORS:  www.sudeban.gov.ve 
- 
ECONOMIC PUBLICATIONS:  www.metroeconomica.com.ve, 
www.veneconomy.com, www.bancomercantil.com, www.provincial.com 
- 
NEWSPAPERS:  www.eluniversal.com, 
www.el-nacional.com 
- 
LEGAL PUBLICATIONS:  www.datalegis.com.ve, 
www.bpmaw.com, www.traviesoevans.com, 
www.tpa.com.ve, www.drba.com.ve 
- 
VENEZUELAN GOVERNMENT: www.venezuela.gov.ve, 
www.platino.gov.ve 
 
FRENCH