Venezuela newspaper El Nacional reported Tuesday that Venezuela’s Central Bank and Goldman Sachs are ready to sign an agreement to swap or exchange international gold reserves with a start date in October 2013 until October 2020.

The negotiated amount is equivalent to 1.45 million ounces of gold, valued at US$1.8 billion at today’s prices, which is to be deposited in the Bank of England with the transfers made directly to Goldman Sachs once delivery times are stipulated. Goldman Sachs will then pay U.S. dollars for the gold.

An adjustment of 10% will be made to the asset value as a hedge in case the international gold market price falls. The annual interest rate will be a combination of dollars with the call BBA Libor equivalent to 8%.

Economist Jose Guerra told El Nacional that the contract is as a result of the decrease in international gold reserves. “The gold operations aim to give liquidity to the Central Bank of Venezuela at a time when they are in the lower limit since 2004. Just $1.2 billion are liquid at this time and are used to fund 10 days of imports,” he said.

Any dispute involving the transaction and its implementation will be resolved in English courts.

Venezuela’s Central Bank reserves have been falling this year. Standard & Poor’s reduced the country’s credit ratings to its lowest in eight years in June as the gold price weakened and compromised Venezuela’s ability to pay its debt.

Economics professor Jose Manuel Puente of the IESA business school in Caracas told Bloomberg earlier this year, “Not only have total reserves fallen, we also have the lowest level of cash reserves.

In September 2011, the late Venezuelan President Hugo Chavez announced he was not only nationalizing the country’s gold mining sector, but was also bring back to the country 211 tonnes in international gold bullion reserves that Venezuela held in foreign banks.

“His decision to repatriate the gold reserves is a potential credit negative to the extent that it makes the handling of Venezuela’s reserve cushion all the less transparent,” said Moody’s at the time.

In 2011 Venezuela held more than 60% of its international reserves in gold, compared to the Latin American average of 8% at the time.

By January 2012, Chavez had brought 160 tonnes of gold bars back to Venezuela, leaving 15 tonnes of gold reserves in foreign banks.