Chavez Emptying Bank of England Vault as Venezuela Brings Back Gold Hoard
Chavez Emptying Bank of England Vault as Venezuela Brings Back Gold Hoard
August 19, 2011
Source: Bloomberg
Venezuelan President Hugo Chavez ordered the central bank to repatriate $11 billion of gold reserves held in developed nations’ institutions such as the Bank of England as prices for the metal rise to a record.
Venezuela, which holds 211 tons of its 365 tons of gold reserves in U.S., European, Canadian and Swiss banks, will progressively return the bars to its central bank’s vault, Chavez said yesterday. JPMorgan Chase & Co. (JPM), Barclays Plc (BARC), and Standard Chartered Plc (STAN) also hold Venezuelan gold, he said.
“We’ve held 99 tons of gold at the Bank of England since 1980. I agree with bringing that home,” Chavez said yesterday on state television. “It’s a healthy decision.”
Chavez, whose government depends on oil for 95 percent of its export revenue, is looking to diversify Venezuela’s cash reserves from U.S. and European banks to include investments in emerging markets including Brazil, China, India, Russia and South Africa, central bank President Nelson Merentes said yesterday. The world’s 15th-largest holder of gold is bringing back its gold after a 28 percent rally in the price this year.
Venezuela’s reserves stood at $28.6 billion on Aug. 16. Finance Minister Jorge Giordani said that the weakening U.S. dollar, a near-default by the U.S. government and the European sovereign debt crisis threaten Venezuela’s savings and they will be more secure at home and in “allied” countries.
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