Venezuela gold holdings in Bank of England soar on Deutsche deal

[dufus]

CARACAS, Jan 21 (Reuters) - Venezuela’s gold holdings in the Bank of England have jumped after it closed out a gold swap deal with Deutsche Bank, according to two sources, as Britain remains reluctant to release gold held for the troubled OPEC nation.

The government of Nicolas Maduro has since last year been seeking to repatriate about $550 million in gold from the Bank of England on fears it could be caught up in international sanctions on the country.

Its holdings at the bank more than doubled in December to 31 tonnes, or around $1.2 billion, after Venezuela returned funds it had borrowed from Deutsche Bank AG through a financing arrangement that uses gold as collateral, known as a swap, one of the sources said.

Under the deal struck with Deutsche Bank in 2015, Venezuela put up 17 tonnes of gold in exchange for a loan, according to one of the sources who asked not to be identified because it is not authorized to speak publicly about the issue.

The country’s gold holdings fell to 134 tonnes in November compared with 150 tonnes at the start of 2018, according to central bank statistics.

This is in part because Venezuela last year started carrying out gold barter operations with Turkey to import food following U.S. sanctions that have made international banks reluctant to handle Venezuelan transactions.

 

The motivation for paying back the funds from the Deutsche swap was not immediately evident. But redeeming the swap would give Venezuela more gold for barter operations with Turkey.

Deutsche Bank declined to comment. Venezuela’s Central Bank did not reply to an email seeking comment.

The Bank of England did not immediately respond to a request for comment. When queried about Venezuela issues in the past, it has said it does not comment on customer operations.

https://www.reuters.com/article/venezuela-gold/venezuela-gold-holdings-in-bank-of-england-soar-on-deutsche-deal-sources-idUSL1N1ZI19I