Thursday, 22 November, 2018

Venezuela Sitting on 2nd Biggest Gold Reserve on Earth — Maduro

Reuters  Shannon Stapleton Reuters Shannon Stapleton
Ginger Lawrence | 06 November, 2018, 18:25

Reuters reported on Monday that Venezuelan authorities have approached the Bank of England in an attempt to get back about 14 tonnes of gold bullion now held in the bank's vaults.

In a televised announcement, Maduro said his government is now certifying 32 gold fields that "are going to set Venezuela as the second largest gold reserve on Earth". The shipment back to Caracas has been held up for almost two months, with a source saying the holdup has to do with the difficulty in obtaining insurance for such a large shipment.

Venezuela's hard currency holdings have dwindled as existing USA financial sanctions have effectively blocked President Nicolas Maduro's government from borrowing on global markets.

"They are still trying to find insurance coverage, because the costs are high", the official said, without clarifying which side is responsible for the holdup.

Last month, Venezuelan officials vowed to make all future transactions in global trade in euros, yuan and "other convertible currency" instead of the U.S. dollar due to the crippling economic and financial sanctions imposed on Caracas by Washington.

US President Donald Trump last week signed an executive order to ban US persons from dealing with entities and individuals involved with "corrupt or deceptive" gold sales from Venezuela.

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Venezuela is in its fifth year of recession with annual inflation at more than 400,000 percent, leading to increased incidence of hunger and disease and spurring an exodus of some 2 million citizens. The crisis has reportedly forced almost a million citizens to flee to neighboring countries.

Since 2014, Venezuela has been using its gold as collateral to get billions in loans from worldwide lenders.

Caracas has been holding its gold reserves in foreign bank vaults, which is a common practice for developing countries. In 2011, Venezuelan socialist leader Hugo Chavez repatriated almost 160 tons of gold from the USA and some European countries.

The move is thought to be a response to recently announced sanctions by the USA, which are aimed at disrupting the South American country's gold exports.

Caracas has been looking to wean itself off of the US-dominated financial institutions and instruments, ditch the dollar and turn to euros and the yuan for global settlements month amid multilayered United States sanctions Venezuelan officials have described as "illegal".

Maduro answered Bolton's comments during a televised speech, saying Venezuela is now certifying 32 gold fields.