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    Visitors are silhouetted against the logo of the International Monetary Fund at the main venue for the IMF and World Bank annual meeting in Tokyo in this October 10, 2012 file photo.

    IMF to Block $400 Million Worth of Venezuelan Funds Until ‘Gov’t Recognition’

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    The international financial body froze Venezuela’s access to its money earlier in January.

    The International Monetary Fund announced Wednesday it will continue to block Venezuela's access to approximately $400 million of special drawing rights until the "issue of government recognition" is clarified.

    The IMF and the World Bank have stated they are ready to move quickly to help ease Venezuela's humanitarian crisis, but the issue of leadership is standing in the way, Inveting.com reported.

    "It is for our members to indicate which authority they are recognising diplomatically so we can then follow through", IMF Managing Director Christine Lagarde told reporters ahead of IMF and World Bank spring meetings in Washington. "It is in progress as we speak, from quite a few members. As soon as that happens, we will follow up".

    This statement has also been reiterated by the Fund's spokesman.

    "Any IMF engagement with Venezuela, including responding to potential financial transaction requests, is predicated on the issue of government recognition being clarified", the spokesman told AFP. "We are guided by our membership on that issue, and at this point, this determination has not been made".

    The IMF blocked Venezuela's access to $400 million earlier in January, after Caracas reduced its total holdings from $1 billion, a Breibart News report recalls.

    "The World Bank will be deeply involved and we are preparing for that, but the situation is still troublesome on the ground", David Malpass, the newly appointed head of the World Bank said.

    The IMF and World Bank statements come in the wake of an announcement made by US Treasury Secretary Steven Mnuchin earlier Tuesday that the US would use both IMF and the World Bank resources "to rebuild Venezuela".

    "The real issue is that we are focused on is what would it take to unlock IMF resources to the interim government and that is something we are constructively working with the IMF on", Mnuchin said. The United States is "very focused at the appropriate time of the transition of using both, IMF and World Bank resources to rebuild the country", he stressed.

    Due to IMF quota system, the US and its EU allies can veto any decision by the Fund, effectively forcing the organisation to act in the interests of the West. The Fund's most important decisions require 85% approval, while lesser steps are decided by a simple majority.

    Venezuela is currently experiencing a severe humanitarian crisis, with food, water, and medicine in short supply. The electric grid is experiencing repeated outages, which Caracas blames on sabotage carried out by the opposition and the US. Washington, meanwhile, continues to introduce new sanctions to cripple Venezuela's oil exports and prevent the Latin American nation from conducting trade.

    Opposition leader Juan Guaido, with support from the US, seeks to oust legitimate president Nicolas Maduro, inciting popular unrest over power outages. The US and its allies recognised Guaido as the nation's leader, despite Guaido still having no control over the presidential palace, the Armed Forces or oil industry. Russia, China, Turkey and other countries recognise Maduro's authority. Russia's UN Representative Vassily Nebenzia accused the US of seizing over $30 billion in Venezuelan funds during a Security Council meeting on Wednesday.

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    Tags:
    funds, money, World Bank, International Monetary Fund, Juan Guaido, David Malpass, Nicolas Maduro, Christine Lagarde, United States, Venezuela
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