Venezuela Moving Up to $30 Billion in Cash Reserves from U.S. to Europe
Associated Press, September 30, 2005 01:50 PM ET
CARACAS, Venezuela (AP) – Venezuela has moved its central bank foreign reserves out of U.S. banks, liquidated its investments in U.S. Treasury securities and placed the funds in Europe, Venezuelan President Hugo Chavez said Friday.
“We’ve had to move the international reserves from U.S. banks because of the threats,” from the U.S., Chavez said during televised remarks from a South American summit in Brazil.
“The reserves we had (invested) in U.S. Treasury bonds, we’ve sold them and we moved them to Europe and other countries,” he said.
Chavez, a sharp critic of what he calls “imperialist” U.S.-style capitalism, has often criticized foreign banks for the power they wield in international financial markets at the expense of poorer countries.
Chavez again proposed the creation of a South American central bank that would hold the foreign exchange reserves of all the central banks in the region.
“I’m ready right now with the Venezuelan central bank … to move $5 billion (euro4.15 billion) (of Venezuelan reserves), to a South American bank,” Chavez said.
Central bank officials could not be immediately reached for more details.
Chavez has also argued against central bank autonomy, saying excess foreign reserves should be spent on economic development projects.
Under his presidency, Venezuela’s mostly pro-Chavez Congress changed central bank laws earlier this year so the government could tap reserves for spending, despite criticism that it would lead to devaluation of the local currency and higher inflation.
Every year the central bank must now compute an “optimum” amount of reserves and hand over the rest to a newly created national development fund.
Money held in the fund will be used for overseas purchases and to pay off outstanding debt.
Foreign exchange reserves held by the central bank stood at $30.434 billion (euro25.27 billion) as of Sept. 28, according to central bank data.