Goldman to BofA Pitch Venezuela Deals to Drum Up Dollars

Goldman Sachs Group Inc. (GS) and Bank of America Corp. (BAC) are among Wall Street firms that offered deals to help Venezuela obtain U.S. dollars amid a plunge in the nation’s foreign reserves.

A swap proposed by Goldman Sachs would provide $1.68 billion in cash and be backed by $1.85 billion of the central bank’s gold, documents obtained by Bloomberg News show. Bank of America said it could be an intermediary for $3 billion in payments to firms seeking U.S. dollars, documents show. Neither deal has been completed, a government official with direct knowledge of the matter said, requesting anonymity because the talks are private.

Dollars are becoming scarce in Venezuela, limiting the supply of products from medicine to toilet paper in a nation that imports about three-quarters of goods it consumes. Foreign reserves dropped 28 percent this year, touching a nine-year low of $20.7 billion this month, largely because 70 percent of the assets are in gold. The metal plunged 26 percent in the period.

“The fact you have dollar shortages is symptomatic of an economy that’s completely broken down,” Robert Abad, who helps oversee $53 billion in emerging-market debt at Western Asset Management Co., said yesterday in a telephone interview from Pasadena, California.

“This is something that’s just incredibly unnecessary, very unfortunate, and the victim of all of this is the real economy, real people.”