IMF, World Bank say they are restoring ties with Venezuela

The International Monetary Fund (IMF) and the World Bank have announced the resumption of ties with Venezuela under the Latin American nation’s interim leader.

The Washington, DC-based financial institutions severed ties with Caracas in 2019 amid a split in the international community over whether to support Nicolas Maduro or Juan Guaido as the country’s rightful leader following disputed presidential elections.

IMF Managing Director Kristalina Georgieva said in a statement on Thursday that the institution had resumed dealings with Venezuela under the administration of acting President Delcy Rodriguez.

“This important step, guided by the views of our members, allows the Fund to re‑engage in a way that can ultimately benefit the Venezuelan people,” Georgieva said in a post on social media.

The World Bank announced that it would follow the IMF’s lead in a statement shortly afterwards, saying it had been “guided by the outcome” of the fellow lender’s decision-making process.

The bank said it had last made a loan to Caracas in 2005.

The announcements come several weeks after United States President Donald Trump’s administration lifted sanctions on Rodriguez, the latest move by Washington to confer legitimacy on the acting leader.

Rodriguez, who assumed power in January after Trump ordered the abduction of former President Maduro to the US to face drug-trafficking and weapons possession charges, welcomed the announcements.

“It has been a great achievement of Venezuelan diplomacy, and I want to thank all the countries and governments that joined in this push for Venezuela’s return to the IMF,” Rodriguez said in an address broadcast on state television.

The moves clear the way for Venezuela to request financial assistance from the international lenders if Caracas deems it to be necessary to shore up the nation’s straitened finances.

The Latin American country has one of the highest debt burdens in the world, with total external liabilities estimated at more than $150bn.

In 2020, the IMF rejected Venezuela’s request for an emergency loan of $5bn to help fund its response to the COVID-19 pandemic, citing the lack of an international consensus on the legitimacy of Maduro’s leadership.

Venezuela has been a member of the IMF and the World Bank since 1946.