Venezuela central bank denies transactions with Wall Street

(Reuters) – Venezuela’s central bank president denied on Thursday that Caracas is carrying out any transactions with Wall Street banks, a day after a senior government source said it was evaluating a swap agreement involving its gold reserves.

Eudomat Tovar
Eudomat Tovar

Asked about reports the government was seeking to fortify its dwindling dollar supplies via such a deal, central bank chief Eudomar Tovar said there were proposals, but nothing more.

He denied there was a stagflationary situation in the OPEC nation, and told a news conference the government’s 6 per cent economic growth target for this year would not be met. He said there would be growth, but did not offer a new number.

“Undoubtedly, we are not going to grow by 6 per cent this year. I can’t speak falsely … But we will grow,” Tovar said.

Less than two weeks before December 8 local elections, the government of President Nicolas Maduro faces chronic product shortages and annual inflation of close to 55 per cent.

Latest data showed Venezuela’s economic growth slowing in the third quarter to 1.1 percent, compared with 4.2 percent in the same period of last year.

Talk of possible deals with foreign banks began when the opposition said last week that the Venezuelan government was negotiating a swap operation with Goldman Sachs involving 1.45 million ounces of gold worth around $1.86 billion.

A senior government source said on Wednesday that nothing was finalized, “but if there’s an opportunity to do something, it could be done.”

Such an operation would effectively let Venezuela borrow against the value of part of its gold reserves, using them as collateral and paying interest to the bank.

Opposition leader Henrique Capriles also said last week that the government was planning an operation in which Bank of America would help pay off debts to foreign suppliers who now have billions of dollars in pending invoices due to payment delays caused by the nation’s currency controls.

 

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