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Thursday March 28, 2024

Venezuela reaches deal with UN to buy food, medicine with gold

By News Report
May 29, 2020

CARACAS: Venezuela has reached a deal with the U.N. Development Programme (UNDP) to destine part of its gold in Bank of England accounts toward the purchase of food and medicine during the coronavirus pandemic, its central bank governor said on Wednesday, foreign media reported.

The deal comes after Venezuela’s central bank made a legal claim earlier this month to try to force the Bank of England to hand over part of the 31 tonnes of gold in accounts belonging to the government of President Nicolas Maduro, whom Britain does not recognize as Venezuela’s legitimate leader due to allegations he rigged his 2018 re-election.

Central bank Governor Calixto Ortega told Reuters that under the arrangement, the UNDP would receive the funds directly, a move meant to assuage concerns about potential corruption.

“It’s not my word, it’s not me saying that I am going to buy food, medicine and medical equipment,” Ortega said in an interview in his downtown Caracas office. “It’s the United Nations who is saying that. They are not going to be involved in anything dark that is not neutral and independent.”

Any program would still require the Bank of England to release the gold. The Bank of England declined to comment

In a statement, the UNDP said it was “approached recently to explore mechanisms to use existing resources held by the Central Bank of Venezuela in financial institutions outside the country to fund the ongoing efforts to address the urgent humanitarian, health, and socioeconomic needs arising from the COVID-19 pandemic.”

Ortega said he was optimistic the legal case in Britain would be resolved in the coming weeks.A six-year economic collapse in Venezuela has resulted in hyperinflation and shortages of basic goods, including food and medicines. Maduro blames U.S. sanctions on the OPEC nation’s oil industry for its woes.While those sanctions have slashed cash flow to the government, critics say corruption and misguided economic policies are the root causes of the collapse.