The International Monetary Fund (IMF) and the World Bank announced on Thursday that they have resumed transactions with Venezuela after a seven-year pause over government recognition issues.
Relations with the Latin American country’s financial institutions deteriorated in 2019 when the IMF recognized the opposition, which controls the parliament, as the legitimate government.
What did IMF and World Bank say?
In recent days, the IMF polled its members on whether they see acting President Delcy Rodríguez as Venezuela’s legitimate leader.
“Guided by the views of International Monetary Fund members representing the majority of the IMF’s total voting power, and consistent with long-standing practice, Managing Director Kristalina Georgieva today announced that the IMF is now working with the Government of Venezuela under the administration of Acting President Delsey Rodríguez,” the IMF said in a statement.
The World Bank Group followed suit, saying it was resuming transactions with the Venezuelan government under Rodriguez.
Venezuela has been a member of the World Bank since 1946. According to the World Bank statement, the last loan to the country was given in 2005.
What does this mean for Venezuela?
The resumption of the formal commitment clears the way for a full IMF assessment of the Venezuelan economy and could later unlock billions of dollars of funding through frozen special drawing rights.
Institutional recognition could also allay fears among foreign private investors who were hesitant to bet on the economically troubled nation.
“We have resumed the representation of Venezuela in this international organization… We are normalizing all procedures that incorporate Venezuelan rights in the organization,” Rodríguez said during an address on Venezuelan state television.
He thanked US President Donald Trump and Secretary of State Marco Rubio, among others, for their help in normalizing relations with the IMF, saying, “This is a very important step for the Venezuelan economy.”
Thursday’s move comes after the Trump administration ousted President Nicolas Maduro on January 3, with the US military raiding the Venezuelan capital Caracas.
America has been working with Rodriguez ever since. Washington is also actively seeking to expand the US presence in Venezuela’s oil and mining sectors.
Edited by: Shawn Sinico