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Venezuela receives loan to boost falling reserves

Published:Wednesday | July 27, 2016 | 7:00 AM

Venezuela is getting some financial relief as it burns through foreign reserves to pay for imports of badly needed food and medicine.

On Monday, the Latin American Reserve Fund said it approved a three-year-loan of US$482 million for Venezuela's central bank.

The loan represents about 5 per cent of the central bank's reserves, which have plunged to a 13-year low as a collapse in oil prices forces the government to scramble for hard currency amid widespread shortages of basic goods.

Venezuela's opposition has questioned the legality of the loan since it didn't have the blessing of congress. But the Colombia-based multilateral lender, which was created by regional governments in the 1970s to assist members in times of financial stress, said Venezuela's Supreme Court signed off on the request.