amoy
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China grants $5.3 billion credit line to Ecuador | Energy & Oil | Reuters
The dip in oil price hurts producers big time. However, a silver lining is Latin Americans and Chinese are pulled closer in a long-term perspective.
Warm-hearted Chinese will be rewarded when it gets out of the slump.
Venezuela's Maduro to visit China, OPEC nations amid cash crunch | ReutersBOGOTA Jan 6 (Reuters) - China has granted a $5.3 billion credit line to Ecuador as the oil-reliant Andean nation reorganizes its finances after a crash in crude prices slashed export earnings, Ecuador's official newspaper reported on Tuesday.
Ecuadorean Finance Minister Fausto Herrera said the government would tap $1.5 billion this year of the 30-year credit, which carries a 2 percent annual interest rate, El Ciudadano reported.
China's state-controlled and trade-focused Eximbank, which offered the new loan, has been one of Ecuador's top financiers, investing heavily in the oil and hydroelectricity sectors. World oil prices have fallen about 55 percent over the past six months.
The loan, granted during an official visit to China by Ecuador's President Rafael Correa, comes as OPEC's smallest member faces challenges from a plunge in global oil prices which on Monday forced the government to cut its 2015 budget by 4 percent.
Venezuela's President Nicolas Maduro, whose country now boasts the world's largest oil reserves, is also making an official visit to China and several unspecified OPEC countries in a trip that comes as Venezuelan bond prices plummet.
--------------------------------------------------------------"I'm leaving today for an international tour ... a very important tour to take on new projects, given the circumstances of falling income that our country faces," Maduro said during a televised broadcast.
His first stop will be China, which has become Venezuela's principal financier through oil-for-loan agreements in which Venezuela receives cash up front in exchange for future deliveries of crude and fuel.
"Also, I'm going to visit other OPEC countries to continue high-level efforts (to create) a strategy for a recovery of oil prices, a strengthening of OPEC," Maduro said. He provided no other details.
Venezuela's economy contracted during the first three quarters of 2014, and its international reserves have deteriorated sharply amid tumbling oil prices.
The decline has spurred concerns that Venezuela may default on its foreign bonds, which in turn has pushed its bond yields to the highest of any emerging market nation.
Maduro denies the country will default. But he says Venezuela's government needs financing in 2015 and says borrowing on international markets is prohibitively expensive.
The dip in oil price hurts producers big time. However, a silver lining is Latin Americans and Chinese are pulled closer in a long-term perspective.
Warm-hearted Chinese will be rewarded when it gets out of the slump.
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