Venezuela's upcoming bond payments have investors on edge; Argentine banks look to get more value out of cashiers; and the performance of right-wing governments in Latin America leaves much to be desired.
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Investors in Venezuelan bonds are set for a "wild ride" as the cash-strapped government nears deadlines for $3.5 billion in debt payments over the coming weeks, Ben Bartenstein reports for Bloomberg News. The stakes are higher than usual as the upcoming due dates have no grace periods, unlike previous amortizations in which the state was granted considerable flexibility in order to evade a default. The government has struggled to honor its debt commitments in recent months, with an increasing number of global financial institutions refusing to do business with Venezuela's maligned regime. Making matters worse is the fact that some of the debt is backed by a majority stake in U.S. refiner Citgo Holding. Investors fear that any delay in the payments might result in an accidental default, while "a few ruthless hedge funds may seek to trigger a credit event in order to get their hands on Citgo."
Banks are teaching their cashiers how to build business amid a declining number of branch-visiting customers, Mariano Gorodisch writes for El Cronista. As a banker notes, operations in traditional branches have "dropped exponentially" due to the advent of digital channels, which has even prompted some banks to reduce the size of its branches. And with cashiers serving fewer customers than before, they are now assigned alternative roles, including product selling, so that "they can have a commercial role, adapt to the current times and occupy their time better." The additional set of business skills will also help branch employees to survive especially at a time when automation is replacing people in operational roles, Gorodisch notes.
Right-wing governments have gained greater acceptance in Latin America in recent years, but have struggled to deliver on their promises following the end of the region's export commodity boom, says Americas Quarterly columnist Patricio Navia. Voters have shunned left-wing incumbents at the polls, hoping that their successors will respond to rising social needs and demand for higher government spending. However, tough fiscal situations and, in some cases, an opposition-controlled congress, have limited the ability of right-wing administrations to institute change. "The stakes are clear: Latin American people believe that left-wing governments were good at distributing the wealth generated in the years of the fatty cows, but they have yet to be convinced that right-wing governments can provide solutions in the years of skinny cows," Navia writes.
Demand for cash in Argentina has grown, eluding the central bank's target of reducing dependency on banknotes and coins by promoting electronic means of payment, Florencia Donovan reports for La Nacion. Current assets held by the public grew month over month in end-September, a period when a sharp decline in the usage of cash is usually observed. The central bank has a hunch that the rise in the demand for cash could be due to the growth of construction, which is a highly informal sector. The phenomenon could also be caused by the "wallet effect," in which the issuance of major denominations, such as the 200- and 500-peso bills, has encouraged the use of cash.