Venezuelan finance minister Ali Rodriguez is on tape hinting again at a debt buyback, and the sovereign is also expected to continue to sell dollar denominated securities in order to control the parallel exchange rate and stem inflation.

“Venezuela continues to buy Argentine bonds which are likely to be the main instrument used to mop up liquidity domestically,” says Merrill Lynch. “Additionally, we could see more Venezuelan sovereign debt as the government still has over $3.5 billion left under its 2008 borrowing plan, of which $4 billion from the total $7.6 billion is allocated towards liability management operations, supporting the notion of a buyback,” adds the shop.

It adds that while Rodriguez says Venezuela is not planning to nationalize more companies, it believes risks remain ahead of the November elections, as the government may try to gain populist support.