President of East Timor wants to form alliance with Brazil and Angola to buy Portuguese sovereign debt

11 March 2011

Lisbon, Portugal, 11 March – the president of East Timor, José Ramos-Horta has suggested setting up an alliance with Angola and Brazil to acquire Portugal’s sovereign debt bonds at less than the current market interest rate.

Speaking to Portuguese Catholic radio station, Rádio Renascença, Ramos-Horta said that the idea was very simple to carry out via a direct bond sale to the alliance of countries.

For East Timor, he said, it could be a good deal because at the moment the country has 90 percent of its Oil Fund invested in US funds, which offer lower rates.

“A bad deal is our investment in US debt that offers an interest rate of less than 3 percent, and so because of inflation and depreciation of the currency we are losing money.”

Ramos-Horta also said he had put the idea to Brazil but had not yet approached Angola. The move would depend, he said, on his government and the country’s parliament revising the law for managing Timor’s oil fund, which requires that at least 90 percent of oil revenues be invested in US treasury bonds. (macauhub)