Venezuela’s international reserves, already at a 30-year low, have hit a grim new milestone as cash holdings fall below $1bn amid crippling economic sanctions.
Venezuela’s central bank now has only about $800mn left in cash and an additional $200mn of other liquid assets, according to three people with knowledge of the bank’s balance sheet. While the country holds some 73 tonnes of gold in local vaults, selling it has become increasingly difficult amid the US efforts to cut off Nicolas Maduro’s regime from a global network of buyers, banks and middlemen.
The shrinking coffers mark a new low for Venezuela, where an economic crisis rooted in the collapse of its all-important oil industry has been exacerbated by wide-reaching US sanctions that have cut the nation off from international capital markets. A shortage of cash could threaten the Maduro regime’s ability to continue food subsidy programmes, import basic goods and maintain support from top military officials.
Press officials for Venezuela’s central bank didn’t respond to requests for comment. A significant chunk of Venezuela’s gold, 32 tonnes worth about $1.6bn, remains in London after the Bank of England declined multiple requests from Maduro to repatriate the gold. While the central bank is independent, the UK government doesn’t recognize Maduro as the country’s legitimate leader and says his regime shouldn’t have access to overseas assets.
Total reserves fell by $832mn this month to $6.11bn, the lowest since July 1989. The drop is largely due to cuts in cash holdings of Chinese yuan, one of the people said.
The reserves also include about $400mn of special drawing rights that are hung up at the International Monetary Fund, which has also shut Venezuela out. The country had already whittled down its SDR holdings from almost $1bn in March 2018.
A sculpture is seen outside a building of Venezuela’s state oil company PDVSA in Caracas (file). The shrinking coffers mark a new low for Venezuela, where an economic crisis rooted in the collapse of its all-important oil industry has been exacerbated by wide-reaching US sanctions that have cut the nation off from international capital markets.
