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Venezuela carries out $1 bln gold swap with Citibank -media

Big Al
April 27, 2015

(Reuters) – Venezuela’s central bank has converted part of its gold reserves into at least $1 billion in cash through a swap with Citibank, local media reported on Friday.

The deal will make more foreign currency available to President Nicolas Maduro’s socialist government as the OPEC nation struggles with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices.

Daily newspaper El Nacional said the deal was for $1 billion and was struck with Citibank, which is owned by Citigroup Co .

Former central bank director Jose Guerra and economist Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica said in separate interviews that the operation had been carried out.

The central bank did not immediately respond to a request for comments. A Citibank official said the company had no comment.

A source at the central bank told Reuters last month it would provide 1.4 million troy ounces of gold in exchange for cash. Venezuela would have to pay interest on the funds, but the bank would most likely be able to maintain the gold as part of its foreign currency reserves.

Most of Venezuela’s foreign reserves are held in gold after late socialist leader Hugo Chavez began moving central bank assets away from the dollar in the wake of the 2007-2009 global financial crisis. (Reporting by Corina Pons and Brian Ellsworth; Writing by Alexandra Ulmer; Editing by Paul Simao)

Discussion
5 Comments
    Apr 27, 2015 27:22 PM

    shows what a bad bussinessman Maduro is. his popularity is low and dropping. the cahrm of his politics has worn out and many young beliviers have become disalluisioned with so called bolivarian socialisim. They need a coup not more 50% inflation . The gold was sold too cheap. S

    Apr 27, 2015 27:28 PM

    I find it odd/sad/ironic that a bank (Citibank) which is clearly in cahoots with the U.S imperial empire and the Federal reserve were allowed to purchase such a key and sensitive asset when you’d naturally think China or Russia to be the natural recipient of such a cheap gift. You have to wonder if there are other political reasons behind such a maneuver?

    Apr 27, 2015 27:38 PM

    or has the coup already begun?

    Apr 27, 2015 27:48 PM

    Is it possible that this swap is the real reason why gold is surging up today?

    Apr 27, 2015 27:56 PM

    Funny when a country is in trouble what does it do, raise cash, raise US$’s!!!!!!!! by selling gold!

    And they will sell what every goldbug holds like its the holy grail …..gold for $’s….just what every goldbug suggests the opposite would happen ….sell useless paper US$’s for gold, lol