Venezuela Cenbank approves $1.32 bln for forex board

Reuters, 03.31.03, 4:24 PM ET CARACAS, Venezuela, March 31 (Reuters) - Venezuela's Central Bank on Monday approved $1.32 billion for distribution in April by the state currency control board that private firms charge has starved the economy of U.S. dollars for more than two months. Currency control board CADIVI said it will distribute $60 million each working day next month under the tight curbs that many private firms fear will force them out of business and drive the economy further into recession. Venezuela had not distributed dollars since President Hugo Chavez suspended foreign exchange trading in late January and imposed the curbs to stem capital flight and a slide in the local bolivar currency after a two-month opposition strike. Government officials say they are still ironing out logistical difficulties that have so far slowed the distribution of foreign currency. While the government has set a fixed exchange rate of 1,600 bolivars to the dollar, the two-month delay in the allocation of dollars has left businesses clamoring for greenbacks. Venezuela's government last week approved the first allocation of U.S. currency only for essential imports, such as medicines, priority materials and basic foods. Chavez said on Sunday that CADIVI had authorized $9.5 million and officials said last week they had approved allocations for only the first five of 60 applications from companies seeking dollars to import goods. Business leaders say many firms are struggling even to clear the application process to access dollars. The South American nation imports around 60 percent of its basic needs and many businesses have warned that the lack of dollars needed to bring goods into the country threatened them with financial ruin. Before the forex market was closed, the Central Bank had been selling around $60 million a day. Since the controls were introduced, a black market has flourished with the dollar trading at between 2,200 bolivars and 2,300 bolivars. Chavez, a populist former paratrooper, introduced the currency controls after the December-January strike disrupted vital oil production in the world's No. 5 petroleum exporter. Oil exports account for half of government revenues.