BCV is planning to create a gold swap providing its contractor party with 1.4 million troy ounces of gold in exchange for cash, media sources report, citing an unnamed central bank source. After four years, BCV would have the right to buy the gold back. Reportedly, at least two financial institutions, Bank of American and Credit Suisse, are currently involved in the ongoing negotiations.
The move would help Venezuela survive the severe cash crunch that has wrought turmoil in the country, which was caused by sharp decline in oil prices and heavy debt payments. The OPEC nation is currently suffering from higher consumer prices, product shortages and a rapidly shrinking economy.
However, neither the Central Bank of Venezuela, nor the aforementioned banks have yet confirmed the information.
It is worth mentioning that up to two-thirds of Venezuela's reserves are held in gold: the country's former leader Hugo Chavez converted most the of state's dollar assets into physical gold in the wake of the world financial crisis of 2008.
