Chávez pulls reserves out of European and US banks

Venezuelan President Hugo Chávez has confirmed plans to keep the country's foreign currency reserves in the banks of allied countries, including Russia. Last Thursday, Chávez said Venezuela may transfer its foreign currency reserves from European and US banks to financial institutions in Russia, China and Brazil, and recall its massive gold reserves from foreign banks.

"The gold should be returned to our vaults, to set an example for our neighbors," he said. "We are going to do it gradually, using a technique used worldwide to bring back the gold, because they are physical bars that were deposited and we must certify that they are the same ones." He said the move will benefit the country's international reserves "ahead of the looming global capitalist crisis."

As of August 8, Venezuela was among the countries with the largest gold reserves, with 365 metric tons of gold worth over $18.3 billion. More than half of the gold was kept abroad. The country's international reserves stood at about $6.3 billion, including 59.17 percent kept in Swiss banks, 17.9 percent deposited in the United Kingdom, 11.31 percent in the United States and 6.48 percent in France.

The move has been interpreted by the Venezuelan opposition as a way of protecting the country's foreign exchange should international sanctions be imposed on the country. "Look what is happening in the Arab world with the use of foreign reserves... there has been a de facto confiscation of these resources, which is something we must avoid at any cost," he said in reference to the assets freeze applied to Libya, Tunisia and Syria.

Chávez was this week virtually the only world leader still offering verbal support to Libya's Colonel Gaddafi as anti-government rebels closed in on Tripoli with the help of what the Venezuelan called "outrageous" bombing by US and European forces.