Venezuela's Interim Government Seeks $4.85 Billion from IMF for Earthquake Relief

Venezuela's interim government, led by Delcy Rodríguez, is actively negotiating with the International Monetary Fund (IMF) for a total of $4.85 billion. The urgent request is intended to provide immediate relief for the emergency situation following the earthquakes that struck on June 24. IMF spokesperson Julie Kozack stated that the government is pushing for the funds to be unlocked "as quickly as possible."

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The government is negotiating with the International Monetary Fund (IMF) for the delivery of total funds of 4.850 billion dollars and asks that these resources be unlocked "as quickly as possible" to address the emergency left by the earthquakes of June 24.

Rodríguez recently held a phone conversation with IMF Managing Director Kristalina Georgieva to discuss the economic situation and the disbursement of funds. Venezuela holds two types of assets at the IMF: its reserve tranche, which can be withdrawn immediately, and Special Drawing Rights (SDRs), an international reserve asset. As of July 8, Venezuela's reserve tranche position stood at nearly $350 million, while its SDR holdings amounted to approximately $4.5 billion.

However, a significant portion of Venezuela's SDRs has remained blocked since 2021. This blockage stems from the fact that the United States and about 50 other Western-aligned democracies do not recognize the legitimacy of Nicolás Maduro's government, citing irregularities in the 2018 elections. The interim government is seeking to overcome this obstacle to access these crucial funds.

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Venezuela's reserve tranche position, which is what they have indicated they would like to use, was almost 350 million US dollars as of July 8. Venezuela's SDR holdings amount to about 4.5 billion dollars.

In addition to IMF negotiations, the interim government is also pursuing the return of approximately $1.9 billion in gold reserves held by the Bank of England. This multi-pronged approach highlights the interim government's efforts to secure financial resources amidst the ongoing political and economic challenges facing Venezuela.

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The discussion between Delcy Rodríguez and the IMF Managing Director covered Venezuela's use of the reserve tranche, which provides an important and readily available source of liquidity that can be mobilized quickly.