The Daily Journal — The devastating twin earthquakes that struck Venezuela on June 24 have immediately reshaped international financial market sentiment. Although the country had achieved a recovery in its sovereign fixed-income securities following the capture of Nicolás Maduro in January, much of that renewed confidence disappeared as the scale of the disaster and uncertainty over reconstruction costs came into focus.
Financial indicators reflected this deterioration in Venezuela’s country risk, as measured by JPMorgan’s Emerging Markets Bond Index (EMBI).
Sharp increase in just a few trading sessions
In the hours before the natural disaster, Bloomberg reported that Venezuelan sovereign bonds had reached their strongest level in months, placing the country’s risk premium at 6,262 basis points. After the earthquakes, however, economic pressures triggered a sharp correction in the debt market.
By July 7, 2026, Bloomberg reported that JPMorgan’s EMBI had climbed to 7,098 points, marking a dramatic increase of 836 basis points in just eight trading sessions.
A more challenging financing environment
The surge interrupted the upward momentum that Venezuelan sovereign debt had enjoyed as investors regained interest following the country’s political transition. Even so, Venezuela still has the world’s cheapest sovereign bonds, underscoring the deep structural challenges facing its economy.
With country risk climbing above 7,000 points, the government now faces a far more difficult path in seeking funding for reconstruction after the twin earthquakes. A higher EMBI significantly increases the cost of issuing debt or securing private international financing—resources expected to play a critical role in rebuilding the country’s urban infrastructure and transportation network after the widespread destruction caused by the earthquakes.
Based on reporting by Bloomberg.
