Maduro sold $ 570 million worth of gold from its reserves to the Central Bank – 17/05/2019

Asphyxiated by the lack of liquidity as a result of the collapse of oil production and US sanctions, the Nicolás Maduro government was forced to sell about 570 million gold in its Central Bank reserves to during the last two weeks.

In this way, he avoided severe sanctions imposed by the US Treasury, including freezing the badets of the Venezuelan government abroad.

According to Maduro, about $ 10 billion is tied up by Washington in accounts around the world.

Clarin Bulletins

What happened today? We tell you the most important news of the day and what will happen tomorrow when you get up

Monday to Friday afternoon.

The government of Donald Trump had already planned to hand over control of these resources to opposition leader Juan Guaidó, proclaimed interim president by Parliament.

According to information from international agencies, Caracas has this month settled two large money transfers. On May 10, he sold 9.7 tons and three days later, another 4 tons.

This has drastically reduced the central bank's reserves, which now stand at only $ 7.9 billion, the lowest figure in 29 years.

The Venezuelan authorities plan to use a large part of the profits obtained to finance imports through the country's foreign trade office.

For a month and a half, Venezuela has already sold 23 tons of gold reserves to maintain the trade of imported products, a source of income to preserve the loyalty of the army since they are senior military commanders who manage this flow of goods. .

Gold is currently the largest part of Venezuela's reserves. This includes $ 1.2 billion of this precious metal deposited at the Bank of England, an entity that recently blocked Maduro's repeated attempts to remove them.

As the international fence is tightening more and more on its financial resources, the Venezuelan government is using gold to finance itself.

Maduro sold large quantities of this metal to various companies in the United Arab Emirates and Turkey.

Mining, especially the sale of gold, is one of the most lucrative financial strategies of the Maduro diet in recent years.

But the operation is very rudimentary. Hundreds of thousands of miners extract gold from improvised and dangerous mines in southern Venezuela, all under the control of the Venezuelan army.

A large amount goes through smuggling that uses the Caribbean Islands as a loophole, but another is purchased by the state through a small group of operators.

Chavismo used this system because of the sharp decline in oil production, which accounted for 96% of the country's revenues in recent decades.

Ten years ago, Venezuela produced 3.2 million barrels of crude oil per day, compared to less than one million today, which is a huge debacle for its finances.

The situation was further complicated by US sanctions that prevented his companies from trading Venezuelan crude. The world's largest power has been the largest buyer in Caracas.

To make matters worse, the country's collapse of energy since last March has reduced production to less than 500,000 barrels a day.

The shift to gold was the only way left to the regime, that of drowning financially. The problem is that Treasury reserves are depleting, leaving the local currency unsupported.

This black horizon led Maduro to try to negotiate an exit, like the one currently being sought in Norway.