Officials in Venezuela decided to sell gold reserves

Due to severe economic crisis, Venezuela sold $1.7 billion in gold in the first quarter of 2016, in a desperate attempt to feed its nationals

Despite Venezuela having larger gold reserves than Saudi Arabia (367 tonnes – 16th in the global classification), the country has been hit by bad management of its leaders, a hit that took a toll on the economy and led to food shortages and general crisis.

Over 40 tonnes of gold have been sold by the country during February and March, IMF data confirms, as the country now has 70 per cent left of the total reserves, accounting for $12.1 billion.

According to the same data source, economy is expected to decrease by 8 per cent during 2016 and 4.5 per cent in 2017, while inflation will most probably surpass 1,642 per cent next year, due to the present fiscal deficit of 20 per cent of GDP.

Moreover, to reduce the economic tensions in the country, Miguel Pérez Abad, Venezuela’s vice-president of the Economia Productiva has announces cutting imports and extending loan dead-lines with China.

“We have a cash flow problem, but we have sufficient assets for the short-term and will reprofile the debt levels in an intelligent manner. There are various scenarios, and all of the proposals are extraordinary for the bondholders. They have the absolute assurance that their securities are guaranteed,” Pérez Abad concluded.