The International Monetary Fund has confirmed that Venezuela holds approximately $4.9bn in Special Drawing Rights that could be accessed once the fund resumes engagement with Caracas, but warned the country faces a "severe and prolonged" economic crisis.

Julie Kozack, the IMF's director of communications, told reporters at a January 15 briefing that the fund requires a majority of its members' voting power to recognise Venezuela's new leadership before re-engagement can proceed, a process that involves assessing whether member countries deal with a particular regime in their own bilateral relationships.

"Since 2019, the IMF's dealings with Venezuela have been paused due to government recognition issues," Kozack said. "In such cases, the IMF is guided by the views of the international community as represented by a majority of total voting power of the IMF members."

The clarification comes as the fund and World Bank reportedly held extraordinary sessions last week to assess Venezuela's situation. The unscheduled meetings preceded talks between US Treasury Secretary Scott Bessent and the heads of both institutions regarding the restoration of formal relations with Venezuela.

Kozack confirmed that the IMF's managing director and Bessent "meet regularly and discuss a wide range of countries and topics", though she declined to provide specific details about their recent conversations or confirm whether specific board meetings on Venezuela had taken place.

The potential unlocking of Venezuela’s SDR holdings – international reserve assets allocated to IMF member countries based on a basket of major currencies – represents a critical element of Washington’s strategy to stabilise the oil-rich country’s collapsing currency and broader economy. Bessent indicated last week that the United States could soon lift additional sanctions to facilitate oil sales and economic recovery, and that currently frozen Venezuelan SDRs could be deployed to support rebuilding efforts.

However, the IMF faces significant challenges in conducting economic assessments without reliable data. Venezuela has not completed the fund's standard annual Article IV review since 2004, and the organisation issued a censure statement against the country in 2018 for failing to provide regular information. Caracas' central bank even ceased releasing inflation data in October 2024.

"We're obviously closely monitoring developments in Venezuela, despite the fact that we have very significant information gaps," Kozack acknowledged.

The IMF spokesperson painted a dire picture of Venezuela's economic situation. Since 2014, approximately 8mn people, roughly one-quarter of the country's population, have fled. Socioeconomic conditions remain marked by high poverty, widespread inequality and shortages of basic services.

"Since late 2024, our assessment is that imbalances and vulnerabilities have re-emerged, driven by lower oil revenues, a widening fiscal deficit, which has prompted increased monetary financing for the fiscal deficit, and a scarcity of US dollar liquidity," Kozack said.

Inflation is estimated in the triple digits, with rapid currency depreciation under way. The fund forecasts that yearly inflation will surge from approximately 270% in 2025 to exceed 680% this year, evoking the era of extreme hyperinflation that destabilised the nation between 2016 and 2019 and triggered mass emigration.

The official dollar exchange rate reached VES338.72 on January 15, representing a 529% year-on-year depreciation. Meanwhile, the bolívar has plunged 20% on the black market since the toppling of President Nicolás Maduro on January 3, prompting many Venezuelans to hold on to US dollars and avoid spending them on daily expenses as they anticipate further depreciation.

Venezuela's public debt stands at an estimated 180% of GDP before accounting for any legal judgments or arbitrations, and the debt is largely in default, as per IMF assessments.

Relations between Venezuela and multilateral lenders soured from the 2000s, when late president Hugo Chávez, a hardline socialist, publicly berated the IMF and World Bank and ordered cancellation of the country’s debts to both institutions. Under Maduro's administration, this isolation deepened, effectively cutting off Venezuela from international financial mechanisms.

Following Maduro's capture, his vice-president Delcy Rodríguez has assumed power. President Donald Trump confirmed on January 14 he had held his first telephone call with Venezuela's acting president, telling reporters, "We just had a great conversation today, and she's a terrific person.” "We had a call, a long call. We discussed a lot of things, and I think we're getting along very well with Venezuela."

US Energy Secretary Chris Wright has stated that Washington will maintain control "indefinitely" over Venezuelan oil sales, ensuring funds are deposited into US-controlled accounts. Trump said that Rodríguez had agreed to turn over between 30mn and 50mn barrels of oil to the US, which would be sold at market prices.