August 22, 2018
American megabank Goldman Sachs is likely to lose heavily on their controversial purchase of Venezuelan bonds, according to an analysis by the Wall Street Journal on Monday.
According to the Journal, “Mutual funds operated by Goldman Sachs Asset Management faced potential losses of at least $63 million on the bonds in the 12 months ended June 30,” while all told market-value losses on the investment are likely to exceed $250 million.
The significant losses come after Venezuelan dictator Nicolás Maduro announced a 96 percent devaluation of the country’s bolivar currency alongside a number of other economic reforms such as increasing the national minimum wage by 3500 percent. Most investors believe this will only further weaken the country’s economy by increasing unemployment and plans to increase government spending, with inflation expected to top one million percent by the end of 2018.
Goldman Sachs purchased around $2.8 billion in Venezuelan bonds last May in a move that was immediately criticized by democracy activists who pointed out that such money would go straight into the hands of Maduro’s socialist dictatorship, responsible for egregious human rights abuses.
This article was posted: Wednesday, August 22, 2018 at 7:41 am