Venezuela moves reserve funds from U.S. to Europe


Richard Moore


Chavez - Venezuela Moves
Reserves From
US To Europe

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

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

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.

© 2005 The Associated Press.


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