Chile Squeezes Venezuela

Sometimes bilateral relations mean public statements by presidents and foreign ministers. Sometimes they are more subtle:

Chile’s central bank said on Wednesday it had revoked a reciprocal credit line with its Venezuelan counterpart, citing what it called Venezuela’s failure to pay back its debts.
 In a statement, Chile’s central bank said it had notified Venezuela’s central bank and that the line would be cancelled within 10 days. The monetary authority said it has been taking steps to mitigate its exposure to Venezuela since 2014 and was currently owed $2.1 million by that country’s central bank.
 “The progressive deterioration of Venezuela’s financial indicators and the (Venezuela central bank‘s) behavior in prior years under this arrangement had already motivated us to adapt measures to safeguard the Central Bank of Chile’s wealth,” the monetary authority said in a statement.
 The Venezuelan central bank had made “intensive use” of the credit line in recent years, Chile’s central bank said.

Venezuela is running low on reserves, cannot keep up oil production, has no other exports, and is deeply in debt. Latin American leaders may talk about sovereignty, non-intervention, or even ideological affinity, but they want their money.

In a sense, this is not a good development for the United States. If Venezuela finds its western hemisphere sources of money unavailable, then it will lean more heavily on China and Russia, which for now continue loaning money partly to tweak the United States and partly to avoid regime change, because who knows what a new government will want to repay. When the U.S. squeezed Cuba with the embargo, it hurt the Cuban people and helped the Soviet Union.

Update: Brazil is also getting edgy.