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Venezuelan bonds tumbled on Monday after the country’s opposition denounced as fraudulent regional elections dominated by government candidates on Sunday. With more than 95 per cent of the vote counted and a turnout of 61 per cent, the National Electoral Council, which is subservient to the government, said President Nicolás Maduro’s socialist party won 17 of 23 governorships across the country. The opposition won five, and one contest was too close to call. The result defied all serious opinion polls in the run-up to the vote, and was attacked by government critics as rigged. Mr Maduro said the socialist party took 54 per cent of the national vote to the opposition’s 45 per cent, meaning that despite presiding over one of the biggest economic downturns in Latin American history, his party has maintained its share of the vote since he came to power in 2013.
“It’s shocking,” said Dimitris Pantoulas, a Caracas-based political analyst. “I find it hard to believe in a country in which there have been months of serious street protests and an economic collapse.” A $3bn Venezuelan sovereign bond due in 2026 fell to trade at 37.2 cents on the dollar on Monday morning in New York, the lowest since April 2016. A bond issued by PDVSA — the state oil company — that is due for repayment in early November edged down to 93.2 cents on the dollar. Given the proximity of the maturity, that translates to an annualised yield of almost 190 per cent — underscoring concerns that Venezuela might not be able to manage a rash of upcoming debt payments. The Table of Democratic Unity (MUD), the main opposition party said: “We refuse to recognise the results given by the National Electoral Council. [The government] know they are not the majority, and the country and the Venezuelan people know it, too.” The results raise the prospect of further international sanctions against Venezuela following those imposed by the US and Canada in recent weeks. The US state department condemned “the lack of free and fair elections yesterday in Venezuela”. “As long as the Maduro regime conducts itself as an authoritarian dictatorship, we will work with members of the international community and bring the full weight of American economic and diplomatic power to bear in support of the Venezuelan people as they seek to restore their democracy,” said spokeswoman Heather Nauert. Nikki Haley, the US ambassador to the UN, called for an audit of the electoral process. The EU is due to discuss Venezuela this week. “No one will accept this result,” Mr Pantoulas said. “I’m quite sure that the European Union will take measures.” Further sanctions could push the embattled and cash-strapped nation closer to default on its $70bn of traded debt. It has to make $2.5bn of repayments over the next three weeks. Mr Maduro’s resounding victory also raised the spectre of a return to the street protests that rocked Venezuela between April and August this year, during which about 125 people died in clashes between anti-government protesters and security forces.
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