Venezuela in talks with Bank of England about repatriation of gold

Venezuela wants to talk to the Bank of England about recovering part of the gold supply, according to reports Reuters. A month ago, the government announced the plan to repatriate gold, but the Bank of England is said to have failed to cooperate in releasing the precious metal. Central Bank Finance Minister Simon Zerpa and Calixto Ortega are said to have traveled to London last week to discuss the issue.

The government of Venezuela is in dire need of money due to the major economic crisis at home. Earlier this year, the central bank even had to sell part of its gold stockpiles. Also, new sanctions were recently imposed on Venezuela, which specifically relate to the gold trade. This combination of factors was probably reason enough for President Maduro to request part of the gold supply in London.

Venezuela wants to retrieve gold

Venezuela plans to import 14 tonnes to retrieve gold from London, but the Bank of England does not want to release the precious metal just like that. British MP Andrew Lewer has asked the central bank not to receive the delegation from Venezuela because the individuals are on a US sanctions list due to corruption charges. It would therefore be inappropriate for the central bank to enter into the conversation, the MP writes in a letter to the Bank of England.

In 2011, the then president of Venezuela, Hugo Chavez, retrieved about 160 tons of gold from abroad. That gold came mainly from the vaults of the Bank of England in London. It is striking that the British central bank is making a fuss about releasing the gold, because it is owned by Venezuela. It would be a political decision not to release gold, while a central bank should not interfere in political affairs.

The Bank of England not only manages the gold of the British government, but also of a large number of other countries in the world. Many emerging economies also store their gold reserves (partly) in London, because it is easy to trade there. The following image of Goldchartsrus shows which countries kept gold in the vault of the Bank of England in 2016.

Bank of England manages gold for a large number of countries (Source: Goldchartsrus)

Venezuela's gold supply has almost halved in recent years (Source: Zero Hedge)