Venezuela is denied access to the International Monetary Fund (IMF) $ 5,000 million ($ 4,170 million) in Special Drawing Rights due to the dispute over Nicolás Maduro’s legitimacy as head of the Latin American country.
Under the Fund’s rules, Venezuela would be one of the main beneficiaries of IMF funds worth $ 650,000 million (more than EUR 540,000 million). The agency’s goal with these funds is to increase global liquidity, and to help emerging and low-income economies cope with the rising debt of the pandemic.
The IMF’s financial aid would equal 81% of the country’s current international reserves, which has been trapped in an economic recession for more than seven years.
However, Venezuela will not be able to access these resources, which most countries will receive through their central banks if approved by the Fund, as more than 50 countries (including the United States) consider the leader of the opposition, Juan Guaidó, to be legitimate. consider. leader of the country since 2018.
“The ongoing political crisis in Venezuela has led to a lack of clarity in the international community, as evidenced by the IMF membership, about the official recognition of the government,” said IMF spokesman Gerry Rice in an interview with Bloomberg, confirming. that the Latin state will not have access to the special drawing rights “until a government is recognized”.
This decision marks another setback for Maduro’s government, which is isolated from a global financial network due to US sanctions.
Conflicts in the relationship between Venezuela and the IMF go back to at least 14 years, when the late former president Hugo Chávez pledged to cut ties with the Washington organization because, in his view, it only served US interests.
This lack of relationship between the two parties has resulted in the body not conducting an Article IV evaluation of the Venezuelan economy under Article IV for 14 years, leading many economists at the Washington-based institution to ‘blind’ the macro- the country’s economic forecasts. .
Reserves for special drawing rights in Venezuela were only $ 12.5 million (€ 10.4 million) last month, a figure much lower than the $ 3.6 billion (€ 3,000 million) recorded in 2009 as a result of global financial crisis, according to IMF data.
Currently, more than two-thirds of Venezuela’s international reserves are in gold. The country faces difficulties in obtaining resources through the sale of precious metal, both because of the United States’ sanctions and the conflict over recognition of the country’s legitimate leader.