Up to 160 tonnes of gold, worth more than $11bn, is expected to be repartriated back to Venezuela [Reuters]

A shipment of gold has been deposited in Venezuela's central bank in Caracas after President Hugo Chavez ordered the repatriation of most of the country's bullion reserves from overseas banks.

Cheering crowds lined the streets on Friday as the shipment was escorted by armoured trucks to the bank from the Venezuelan capital's Maiquetia airport, beginning a process that will eventually see up to 160 tonnes of gold, worth more than $11bn, brought home.

Chavez ordered the repatriation of 85 per cent of the country's bullion, which has mostly been held in European and US banks, saying the move would protect Venezuela's reserves from global economic turbulence.

"It's coming to the place it never should have left. ... The vaults of the central bank of Venezuela, not the bank of London or the bank of the United States. It's our gold," Chavez said on national television.

Nelson Merentes, the president of the central bank, said the gold had come from the UK but did not say how much was in the first shipment, citing security concerns.

'It's a guarantee'

The gold had been held abroad since the late 1980s as backing for loans requested from the International Monetary Fund by prior governments, he said.

Merentes called the repatriation of the gold a "guarantee" for the country.

"If there's some problem in the international markets, here it's going to be safe," he said.

Chavez's opponents have called the plan costly and ill-advised, while some suggested Chavez was acting out of fear that Venezuela's overseas assets could one day be frozen by sanctions, as happened to those of his ally, the late Libyan leader Muammar Gaddafi.