Venezuela nears deal to move $4 billion gold reserve to New York, FT says

The Venezuelan government and the opposition are close to an agreement to transfer the central bank's gold reserves, worth about $4 billion, from the Bank of England to the Federal Reserve Bank of New York, the Financial Times reported on Friday.

Reuters could not immediately verify the report, which cited four people familiar with the discussion.

Under the proposed deal, the interim government of Delcy Rodriguez would gain legal control of the gold but would be unable to sell the holdings immediately, the report said.

Instead, the reserve could be used as collateral for government borrowings, including for reconstruction following June’s twin earthquakes, the newspaper added.

A spokesperson for the British foreign office said the government was "not a party in the legal case to determine who should have control of Venezuelan gold held in the Bank of England."

UK Courts and the Bank of England are independent of government, the spokesperson added.

In response to a Reuters query, the Bank of England said it is not in a position to act until there is a further order from the UK Court on who has legal authority over the account.

"This requires the parties involved in the case to approach the UK Court to settle the dispute," the BoE said.

Gold could be used to try to counter inflation

The Federal Reserve Bank of New York did not immediately respond to Reuters' requests for comment outside regular business hours. The Venezuelan government and the opposition could not be reached for comment.

Last month, Venezuela's National Assembly chief Jorge Rodriguez said the country was working to recover gold reserves held in the Bank of England's underground vaults, in an effort to counter surging inflation.

The Bank of England has withheld about 31 metric tons of Venezuelan gold for years, citing its non-recognition of the legitimacy of then-president Nicolas Maduro's government.

The BoE's refusal to release the gold goes back to early 2019 when the British government joined dozens of nations in backing then Venezuelan opposition leader Juan Guaido on the basis that Maduro's election win the previous year had been rigged.

The bullion has since been the subject of a prolonged legal dispute in British courts, and has not been released despite Maduro's capture by the US in January and a ​request by acting President Delcy Rodriguez to King Charles.

“The UK maintains its longstanding position of support for a democratic transition of power in Venezuela which reflects the will of the Venezuelan people,” the spokesperson for the British foreign office said.