The Venezuelan government is looking to bring 14 tons of gold, held in Britain, back to Venezuela. Caracas is planning is looking to repatriate around $550 million in gold bars from the Bank of England due to increasing concerns about looming US sanctions.
The plan on repatriating the gold bars, kept in London, has been reportedly discussed for nearly two months amid increased difficulties in getting insurance for the shipment needed to move a large gold cargo.
Venezuela’s foreign exchange holdings have significantly declined since the already-imposed US penalties banned the country’s government from borrowing cash on international markets.
A new round of anti-Venezuelan sanctions was introduced by the White House last week. They ban US citizens from dealing with entities and people involved with gold sales in Venezuela.
The South American country is currently dealing with one of the worst economic crises in history, going through a fifth year of recession and an annual inflation of more than 400,000%. The crisis has reportedly forced nearly a million citizens to flee to neighboring countries.
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 nearly 160 tons of gold from the USA and some European countries.
Since 2014, Venezuela has been using its gold as collateral to get billions in loans from international lenders. As a result, the country’s gold reserves have been significantly depleted.
Swap agreements became difficult for Venezuela in 2017 after Washington banned US financial institutions from financing operations there. With the penalties in place, it’s impossible to sell the gold straight from the Bank of England.
The UK says it’s very hard to obtain insurance for the shipment to move the large cargo. Even if Venezuela gets the gold back, it’ll be a large order to use it for raising hard currency because of the new round of US sanctions announced on Nov.1..
Venezuela has developed special mechanisms allowing the country to keep trading with foreign partners despite the existing and looming penalties introduced by the USA.
Caracas plans to swap the country’s crude oil for imported products. According to Jesus Faria, the Vice President in charge of economic affairs of the United Socialist Party of Venezuela (PSUV).
“Oil is our key resource for participating in the international trade. Without a doubt, we are trying to use it to resist external pressure,”
According to the official, launching of El Petro, the first state-sponsored oil-backed crypto-currency, is set to help the Venezuelan government to combat the tough economic situation.
Over recent years, Venezuela has become subject to numerous US sanctions, hitting the country’s finances and debt issuance, as well as state oil company PDVSA.
Now Washington accuses the Venezuelan government of violating human rights and undermining democracy. For that fake reason Venezuela will not get its gold back. To motivate this decision, London will tell Caracas that the shipment can not be insured.
RT.com / ABC Flash Point Zionist News 2018.
