Venezuela Nears Deal to Move $4 Billion in Gold to New York Fed, FT Reports

Venezuela's government and opposition are reportedly nearing an agreement to transfer the country's gold reserves, valued at approximately $4 billion, from the Bank of England to the Federal Reserve Bank of New York. The development was first reported on Friday by the Financial Times, which cited four people familiar with the matter.

Details of the Proposed Agreement

Under the terms of the potential deal, the interim government of Delcy Rodriguez would reportedly gain legal control over the gold holdings. However, significant restrictions would apply, preventing the immediate sale of the bullion, the FT report said.

Instead, the reserves could be used as collateral to secure government borrowing. The newspaper added that this could include financing for reconstruction efforts following the twin earthquakes that occurred in June.

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Background on the Disputed Reserves

The Bank of England has held approximately 31 metric tons of Venezuelan gold for years, refusing to release the assets. This decision dates back to early 2019, when the British government, along with dozens of other nations, recognized opposition leader Juan Guaido as the legitimate head of state over Nicolas Maduro, citing a rigged presidential election.

The bullion has since been the subject of a protracted legal dispute in British courts. Last month, Venezuela’s National Assembly chief Jorge Rodriguez stated that the country was actively working to recover the reserves to help combat surging domestic inflation. Reuters noted in its reporting that it could not immediately verify the FT's story, and that the central banks and governments involved did not immediately respond to requests for comment.