Venezuela really wants its $550 million worth of gold back from the Bank of England

Reuters/Shannon Stapleton

• The deepening economic crisis in Venezuela means its government wants to get back its gold reserves worth more than $500 million.
• According to Reuters, Venezuelan authorities have approached the Bank of England in an attempt to repatriate about 14 tons of gold bullion currently held in the bank's vaults.
• The move is thought to be a response to recently announced sanctions by the US, which are aimed at disrupting the South American country's gold exports.
• Venezuela is aggressively selling its gold reserves to fund attempts to cope with the crisis, which has caused widespread poverty and violence.

The deepening economic crisis in Venezuela means the government really wants to repatriate its gold reserves worth more than $500 million.

Reuters reported on Monday that Venezuelan authorities have approached the Bank of England in an attempt to get back about 14 tonnes of gold bullion currently held in the bank's vaults. It's common practice for emerging market governments to store gold within the central banks of more developed economies.

Citing two public officials with direct knowledge of the operation, Reuters said that the plans relate to recently announced sanctions by the US, which are aimed at disrupting the South American country's gold exports.

US President Donald Trump last week signed an executive order to ban US persons from dealing with entities and individuals involved with "corrupt or deceptive" gold sales from Venezuela.

Read more: 10 pictures reveal the huge amounts of cash Venezuelans need to buy everyday things

It is unclear whether Venezuela is now in possession of the gold previously held by the Bank of England, but Reuters reports that the bank has "sought to clarify" what Venezuela is actually planning to do with the gold before handing it back.

The Bank of England declined to comment to Business Insider.

Over recent years, Venezuela has been a major seller of gold, and this year alone has sold around 24 tonnes - worth close to $900 million - to Turkey. In the past four years, the country's gold reserves have decreased from about 360 tonnes to 160 tonnes.

Venezuela selling out of its sizeable gold reserves - which were built up under Hugo Chavez - has been used as a means of trying to address the enormous economic crisis plaguing the country. Hyperinflation of goods means that everyday items are completely unaffordable for many Venezuelans, and poverty and violence are widespread.

In August, a report from the International Monetary Fund said Venezuela's economy was expected to contract by about 18% in 2018, while inflation is forecast to reach a whopping 1 million percent.

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