CARACAS, April 24 (Reuters) - Venezuela’s central bank has converted part of its gold reserves into at least $1 billion in cash through a swap with Citibank, local media reported on Friday.
The deal will make more foreign currency available to President Nicolas Maduro’s socialist government as the OPEC nation struggles with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices.
Daily newspaper El Nacional said the deal was for $1 billion and was struck with Citibank, which is owned by Citigroup Co .
Former central bank director Jose Guerra and economist Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica said in separate interviews that the operation had been carried out.
The central bank did not immediately respond to a request for comments. A Citibank official said the company had no comment.
A source at the central bank told Reuters last month it would provide 1.4 million troy ounces of gold in exchange for cash. Venezuela would have to pay interest on the funds, but the bank would most likely be able to maintain the gold as part of its foreign currency reserves.
Most of Venezuela’s foreign reserves are held in gold after late socialist leader Hugo Chavez began moving central bank assets away from the dollar in the wake of the 2007-2009 global financial crisis. (Reporting by Corina Pons and Brian Ellsworth; Writing by Alexandra Ulmer; Editing by Paul Simao)
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