MercoPress. South Atlantic News Agency

Chavez health and ‘arbitrary laws’ make S&P downgrade Venezuela’s rating

US ratings agency Standard & Poor's downgraded Venezuela's foreign and local currency sovereign ratings by one notch Friday, citing the country's political risk as a credit weakness.

S&P lowered the country's sovereign currency rating once notch Friday from BB-minus to B-plus with a stable outlook.

In a statement, S&P said “changing and arbitrary laws, price and exchange controls, and other distorting and unpredictable economic measures have undermined private-sector investment and hurt productivity,” and have weakened Venezuela's economy.

The agency also said uncertainty about the health of Venezuelan President Hugo Chavez has added to the country's economic risks.

Mr. Chavez has undergone two rounds of chemotherapy in Cuba to treat a cancerous tumor. In June, Cuban doctors performed surgery on him to remove a tumor. The 57-year-old president has vowed to recover and insists he will seek another six-year term in 2012.

The S&P downgrade came after Chavez announced plans Wednesday to repatriate 211 tonnes of gold held overseas and to nationalize gold exploration.