CARACAS (Reuters) – Venezuela’s top court has ruled that the country’s central bank does not need congressional approval to seek a loan from a multilateral agency to shore up the OPEC nation’s flagging international reserves.
The ruling paves the way for the government of President Nicolas Maduro to borrow from the Latin American Reserves Fund, part of the Andean Community without discussing the issues with the opposition-dominated legislature.
Local media has reported that Venezuela is seeking a $1 billion loan from the group known as FLAR to boost international reserves, which have fallen to their lowest level in nearly 14 years on low oil prices and a prolonged economic crisis.
In a ruling released late on Wednesday, the court argued that a potential loan agreement would be “carried out through an international agreement, and in consequence … is not subject to the authorization of the National Assembly.”
The Supreme Court has routinely backed the Maduro government in disputes with Congress, which the opposition won by a wide margin in December.
The opposition quickly dismissed the ruling as an effort by the court to help Maduro bypass Congress.
“The FLAR argued that (Venezuela) could not access the loan without the National Assembly’s approval,” said opposition legislator Jose Guerra. “That’s why they put out the sentence.”
The FLAR did not immediately respond to a request for comment. A central bank spokeswoman said the institution had no information to provide on the issue.
Venezuela’s government has in the past sought to bolster reserves by withdrawing from an International Monetary Fund account that holds an instrument known as Special Drawing Rights, or SDRs.
It has also carried out gold swaps to increase the liquidity of its reserves as its struggles with triple-digit inflation and chronic product shortages.
The Maduro government has not yet borrowed from the FLAR, where it has deposits of some $500 million, according to central bank financial statements.
Heavy debt payments have forced Venezuela to imports of basic goods, leaving spending hours in line for food and medicine and helping push international reserves below $12 billion.
(Reporting by Diego Oré; Additional reporting by Corina Pons; Editing by David Gregorio)