Venezuela sold $1.7B in gold this year; lowest reserve level on record

CARACAS, Venezuela, May 26 (UPI) -- Venezuela has sold at least $1.7 billion in gold reserves to pay debts this year, decreasing the South American country's gold reserves to the lowest level on record.

Venezuela sold more than 40 tons of gold in February and March, and in the past year the country's reserves have dropped by nearly a third. Last week, Venezuela's total reserves fell to a low of $12.1 billion, of which gold accounts for nearly 70 percent.

The International Monetary Fund predicts the Venezuelan economy will shrink 8 percent in 2016 and will contract an additional 4.5 percent in 2017. Venezuela, which had the world's 16th largest gold reserves, began selling part of its 367 tons of gold reserves in March 2015 -- likely to Russia, China and Switzerland.

Venezuela and its government-run oil company, PDVSA, have about $6 billion in principal and interest debt payments this year. Inflation is forecast to exceed over 1,600 percent in 2017. Venezuela has been the biggest seller of gold out of all countries in four of the last five financial quarters.