The Venezuelan government removed about 6 tonnes of gold from the central bank’s vaults between late last year and early this year to raise more hard currency for Venezuelan President Nicolas Maduro’s cash-strapped administration, two government sources familiar with the movement said.
Last year, Maduro’s government repeatedly withdrew monetary gold to exchange it abroad for euros in cash, sources said at the time, as falling oil production, an economic collapse and US sanctions hit public income and restricted access to credit.
The government has never publicly commented on this.
Photo: EPA
The new removals of gold bars worth about US$350 million lowers the central bank’s reserves to about 90 tonnes, the sources said, down from 129 tonnes at the start of last year.
Neither the central bank nor the Venezuelan Ministry of Communication and Information, which handles media inquiries for the government, responded to requests to comment.
The bank’s public financial records show that on Dec. 30 the reserves’ value dropped by US$800 million to US$6.63 billion that day.
A third source familiar with the bank’s reserves said this was, in part, due to a “withdrawal of monetary gold,” without detailing providing further details.
It is unclear how many withdrawals the central bank carried out between late last year and early this year.
The government sources declined to specify dates or where the gold was headed.
The use of euros in Venezuela’s hyperinflationary economy became more commonplace last year. Venezuelan domestic banks began to offer euros supplied by the central bank to local companies and the government paid off suppliers and contractors in the currency, sources said.
The central bank last year exported gold to Turkey and the United Arab Emirates, according to Turkish government data and a confirmation from an Abu Dhabi investment firm that purchased several tonnes.
The US, which is backing an attempt by Venezuelan National Assembly President Juan Guaido to force Maduro to step down and call new elections, has warned bankers and traders not to deal in Venezuelan gold.
Maduro’s government also has been seeking to repatriate about 31 tonnes of gold in the Bank of England’s vaults on fears it could be caught up in international sanctions on the country.
The bank has said it does not comment on customer relationships.
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