Venezuela withdraws foreign reserves from US banks ... first
step to Euro?
...In the course of the meeting, which all South American
leaders attended, Chavez proposed that they should all consider
depositing a part of their foreign currency reserves in a
newly-created South American development bank. Venezuela would
be willing to launch such a bank with an initial deposit of $5
billion. According to Chavez, such a South American
development bank could eventually include countries from Asia
and Africa, to become a world bank.
"It is a stupidity that a majority of our international
reserves are in banks of the North," said Chavez to the
gathered leaders.
More steps to an alternate global economy! Imagine the alarm
bells that must be going off on Wall Street and in London.
rkm
--------------------------------------------------------
http://www.vheadline.com/readnews.asp?id=46190
Business
Published: Sunday, October 02, 2005
Bylined to: Bernardo Delgado
Venezuela withdraws foreign reserves from US banks ... first
step to Euro?
Venezuelanalysis.com Bernardo Delgado writes: President
Chavez has announced that Venezuela has sold its foreign
currency reserves ... which were held in US treasury bonds ...
and deposited them in banks in Europe. "We have had to
withdraw our international reserves from US banks, due to the
threats we have," said Chavez, according to the Associated
Press.
Chavez went on to say that his government is interested in
depositing a part of its reserves in Latin America. "Just as
we moved them to Europe, we can move them to a South American
bank. By god, don't tell me that's impossible."
Chavez made the comments in the context of a summit of South
American leaders, which took place in the Brazil's capital of
Brasilia.
In the course of the meeting, which all South American leaders
attended, Chavez proposed that they should all consider
depositing a part of their foreign currency reserves in a
newly-created South American development bank. Venezuela would
be willing to launch such a bank with an initial deposit of $5
billion. According to Chavez, such a South American
development bank could eventually include countries from Asia
and Africa, to become a world bank.
"It is a stupidity that a majority of our international
reserves are in banks of the North," said Chavez to the
gathered leaders.
Recently, Venezuela's National Assembly changed the country's
central bank law, so that "excess" foreign reserves can be
used for repayment of Venezuela's foreign debt or for
purchases abroad.
The Central Bank is to calculate how much foreign reserves
Venezuela ought to have and reserves in excess of this amount
would be transferred to a special development fund.
Until recently, the Venezuelan Central Bank held $32 billion,
of which $2 billion have already been transferred to the
development fund. Chavez says that the ideal foreign reserve
level is $25 billion ... which means that the government could
have access to another $5 billion.
Venezuela's foreign reserves have reached historical heights
in the year because of the combination of high oil revenues
and currency controls, which largely function to keep the
revenue in the country.
---
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