This is an archived article that was published on in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Venezuela's government, pledging to do what it takes to keep current on its debt, will cut imports by almost half this year to preserve hard currency even as its citizens struggle with shortages of basic goods and soaring inflation.

"We've applied a very austere program," Vice President for Economic Policy Miguel Perez Abad said at an interview at his office in Caracas, adding that imports would probably fall to about $20 billion this year from $37 billion in 2015. "We're going to maintain this level of restriction to force the productive sector of the economy to increase output. Hopefully we could cut imports to as low as $15 billion."

The South American country is seeking to reassure investors that paying them remains a top priority even as swaps traders wager that the plunge in oil prices over the past two years means the government is likely to default on its bonds within a year.

Eurasia Group, a global research and consulting firm, on Thursday scrapped its forecast for the government to miss payments this year, citing the decrease in imports.

The government is continuing to explore liability management to ease its debt burden over the coming years and is studying various proposals, all of which would be good for bondholders, Perez Abad said.

Venezuela will continue use international reserves, which hit a new 13-year low of $12.2 billion on Tuesday, to help it meet its commitments, he added, declining to specify how much the country had in off-budget accounts.

"The government is working very well on this debt re-profiling and search for capital," he said. "There are various proposals. We have a cash-flow problem, but we have sufficient assets for the short-term and will re-profile the debt levels in an intelligent manner. There are various scenarios, and all of the proposals are extraordinary for the bondholders. They have the absolute assurance that their securities are guaranteed."

China wants to keep supporting Venezuela, and a renewal of a $5 billion loan is likely to be completed in about 60 days, Perez Abad said.

The country's benchmark dollar bond due in 2027 rallied, climbing 1.18 cents to 45.13 cents on the dollar as of 2:27 p.m. in New York. The cost to insure Venezuelan debt against default for one year tumbled 193 basis points to 6634 basis points.

The contracts are still the most expensive for any government in the world, with the price implying a 63 percent chance the country will miss a bond payment sometime in the next 12 months.

Venezuela is continuing to test its currency market known as Dicom and will publish new rules that will expand its use in about 30 days, he said, adding that the rate, currently about 400 bolivars per dollar compared to an official rate for priority imports of 10, is nearing a true market price.

About 30 percent of the foreign exchange being sold through the system is now coming from the private sector, he said.

The bolivar has declined about 50 percent on the alternative market since it was revamped in March.

"There's an equilibrium exchange rate that we can't announce right now, but the market knows what it is," Perez Abad said. "We're closer to that point, and we've held conversations with private and international companies and they are starting to use the system for transactions."

While the central bank hasn't yet published official inflation data for this year, the expanded use of the Dicom market will help curb price increases, which are partly driven by the illegal black market for greenbacks, according to Perez Abad.

Prices won't rise by the almost 500 percent the International Monetary Fund is forecasting this year, he said.