Venezuela's government and opposition are close to a deal that would move gold reserves worth about $4 billion from the Bank of England to the Federal Reserve Bank of New York. The gold would serve as collateral for government borrowing rather than an outright sale, while a separate, older tranche stays locked up in a British court dispute.
Venezuela's government and opposition are nearing an agreement to transfer gold reserves worth about $4 billion from the Bank of England to the Federal Reserve Bank of New York, the Financial Times reported Friday, citing four people familiar with the discussions. Reuters said it could not immediately verify the report.
Gold would back borrowing, not a sale
Under the proposed deal, the interim government of Delcy Rodriguez would gain legal control of the gold but would not be able to sell it immediately. Instead, the reserve could be used as collateral for government borrowing tied to reconstruction after June's twin earthquakes, the newspaper added.
Last month, Venezuela's National Assembly chief Jorge Rodriguez said the country was working to recover gold held abroad to help counter surging inflation.
London says it isn't a party to the case
A spokesperson for the British foreign office said the UK government is not a party to the legal case deciding who controls the Venezuelan gold held in the Bank of England, adding that UK courts and the central bank act independently of the government. The Federal Reserve Bank of New York and the Bank of England did not immediately respond to requests for comment, and neither the Venezuelan government nor the opposition could be reached.
A 31-ton holdout dating to 2019
The Bank of England has withheld about 31 metric tons of Venezuelan gold for years, citing its non-recognition of Nicolas Maduro's government. The refusal dates to early 2019, when the British government joined dozens of nations in backing then-opposition leader Juan Guaido, on the basis that Maduro's election win the previous year had been rigged.
Since then, the bullion has remained the subject of a prolonged legal dispute in British courts. It has not been released despite Maduro's capture by the US in January and a request by acting President Delcy Rodriguez to King Charles.
Source: Commodities & Futures News
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