CARACAS (Reuters) - The Venezuelan government removed some six tonnes of gold from the central bank’s vaults between late 2019 and early 2020 to raise more hard currency for President Nicolas Maduro’s cash-strapped administration, according to two government sources familiar with the movement.
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 U.S.-imposed sanctions hit public income and restricted access to credit. The government has never publicly commented on this.
The new removals of gold bars worth about $350 million lowers the central bank’s reserves to about 90 tonnes, the sources said, down from 129 tonnes at the start of 2019.
Neither the central bank nor the information ministry, which handles media enquiries for the government, responded to requests to comment.
The bank’s public financial records show that on Dec. 30 the reserves’ value dropped by $800 million to $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 2019 and early 2020. The government sources declined to specify dates or where the gold was headed for.
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 told Reuters.
In 2019, the central bank 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 United States, which is backing an attempt by opposition leader 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 some 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.
Writing by Angus Berwick; Editing by Daniel Flynn and Marguerita Choy