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Citigroup to sell Venezuelan gold in setback to President Maduro, sources tell Reuters
Looks like the Western central banks need the metal pretty badly. Otherwise wouldn't Citigroup keep the metal for itself, now that the price is rising?
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By Mayela Armas and Corina Pons
Wednesday, March 20, 2019
CARACAS, Venezuela -- Citigroup Inc. plans to sell several tons of gold placed as collateral by Venezuela's central bank on a $1.6 billion loan after the deadline for repurchasing them expired this month, sources said, a setback for President Nicolas Maduro's efforts to hold onto the country's fast-shrinking reserves.
Maduro's government has since 2014 used financial operations known as gold swaps to use its international reserves to gain access to cash after a slump in oil revenues left it struggling to obtain hard currency.
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In the past two years, however, it has struggled to recover its collateral.
Under the terms of the 2015 deal with Citigroup's Citibank, Venezuela was due to repay $1.1 billion of the loan on March 11, according to four sources familiar with the situation. The remainder of the loan comes due next year.
Citibank plans to sell the gold held as a guarantee -- which has a market value of roughly $1.358 billion -- to recover the first tranche of the loan and will deposit the excess of roughly $258 million in a bank account in New York, two of the sources said. ...
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