Russia hopes to agree on debt repayment with Venezuela by year-end

Konstantin Vyshkovsky, head of the state debt department at the Russian finance ministry, speaks during an interview on the sidelines of Moscow Financial Forum in Moscow, Russia September 8, 2017. REUTERS/Andrey Ostroukh

MOSCOW (Reuters) - The Russian finance ministry wants to find a solution on how Venezuela will fulfill its debt obligations to Moscow by the end of this year, a senior ministry official said on Friday.

Konstantin Vyshkovsky, head of the state debt department at the finance ministry, told Reuters that Venezuela owed Russia more than $3 billion.

Venezuela borrowed from Russia in late 2011 but failed to keep up with payments on the debt in 2016 as the South American state faced a full-blown economic and financial crisis.

“For now we consider it to be a liquidity crisis but not a crisis of financial solvency,” Vyshkovsky said.

Vyshkovsky said that the finance ministry hoped to agree on new conditions for how Caracas would honor the debt by the end of 2017.

“What the conditions would be like and how quickly we would find a compromise remains to be seen. But our partners speak about a strong desire to reach an agreement quickly,” Vyshkovsky said.

Vyshkovsky declined to say when he would expect Caracas to pay back its debt.

Venezuela’s unraveling socialist government is increasingly turning to ally Russia for the cash and credit it needs to survive, according to a Reuters special report published last month.

Reporting by Darya Korsunskaya, Andrey Ostroukh and Yelena Orekhova; Additional reporting by Polina Nikolskaya; Editing by Christian Lowe