BREAKING NEWS

BREAKING NEWS

Venezuelan opposition asks Citibank to delay gold repurchase - sources

Venezuelan opposition asks Citibank to delay gold repurchase - sources
Venezuelan opposition leader Juan Guaido, who many nations have recognized as the country's rightful interim ruler, speaks during the meeting with public employees in Caracas, Venezuela March 5, 2019. REUTERS/Carlos Garcia Rawlins -
@ Copyright :
CARLOS GARCIA RAWLINS(Reuters)
Text size Aa Aa

By Mayela Armas

CARACAS (Reuters) - Opposition leader Juan Guaido has asked Citibank to delay by 120 days Venezuela's scheduled repurchase of gold that President Nicolas Maduro's government put up as collateral for a loan in 2015, three members of the team advising Guaido said.

Advisers to Guaido, who has been recognised by most Western nations as Venezuela's legitimate head of state, have met with Citibank officials to ask them to hold off claiming the gold that Maduro's cash-strapped government committed to give up if it failed to pay off the loan by its March due date.

One of the sources told Reuters that Citibank has not yet informed them whether or not it will agree to the request. A Citibank spokesperson declined to comment. Venezuela's Information Ministry and the central bank did not respond to requests for comment on the status of the loan and its own discussions with Citibank, if any.

The request is part of the opposition's strategy to safeguard Venezuela's foreign assets and prevent the socialist Maduro government from selling off gold reserves to raise hard currency amid tightening sanctions.

Guaido, who invoked the constitution to assume an interim presidency in January, accuses Maduro of being illegitimate; Maduro says he is victim of a U.S.-led economic war to force him from power.

The U.S. government has recognised Guaido as Venezuela's leader and anchored that decision by ordering all U.S. companies buying crude from state oil company PDVSA to make payments into bank accounts controlled by Guaido's government.

Maduro's government began to use gold swap deals some four years ago in order to obtain financing as oil income plummeted in the face of sanctions. Under such agreements, if the borrower does not pay back the loan on time, the financial institution keeps the gold.

Venezuela allowed a similar gold swap arrangement to expire in 2017, a legislator said at the time.

https://www.reuters.com/article/us-venezuela-economy/venezuela-allows-1-7-billion-gold-swap-with-deutsche-to-lapse-legislator-idUSKBN1CS2CD

In a public report filed with the U.S. Securities and Exchange Commission in February, Citibank said the Venezuelan Central Bank (BCV) had agreed to repurchase an undisclosed amount of gold in March as part of an agreement signed by both institutions in 2015. The report did not give an exact date for the agreement.

In the deal, the BCV had sold $1.6 billion of gold to a British unit of Citibank, to be held at the Bank of England, according to the report filed to the U.S. market regulator.

The sources did not specify whether repurchasing the gold would cost more or less than the original $1.6 billion (1.2 billion pounds).

"The next such date will be in March 2019 at which time the BCV will be required to purchase a significant amount of gold from Citi under terms of the Agreements," it said in the report.

Guaido has asked British authorities to prevent Maduro from gaining access to any gold reserves held in the Bank of England, which holds around $1.2 billion in bullion for Maduro's government.

The Bank of England has said it does not comment on client operations.

(Additional reporting by Corina Pons; Writing by Angus Berwick; Editing by Sonya Hepinstall)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.