Tue May 20, 2003 05:23 PM ET By Todd Benson

SAO PAULO, Brazil, May 20 (<a href=reuters.com>Reuters) - Concerns that the United States may be backing off its "strong dollar" policy might cause headaches from Tokyo to Brussels, but the impact on Latin America's volatile currencies is likely to be less painful, analysts said on Tuesday.

With the exception of Ecuador, which scrapped the sucre for the U.S. dollar in 2000, the region's leading currencies tend to take their cues more from local politics and capital flows than the greenback's price against the euro or Japanese yen.

So when U.S. Treasury Secretary John Snow suggested over the weekend that he was comfortable with the dollar's recent decline -- comments the White House distanced itself from on Tuesday -- the reaction in Latin America was muted at best.

"Currency traders here spend most of their time looking at domestic factors, so the whole debate about the strong dollar policy isn't likely to have much of an impact for now," said Sergio Machado, Treasury Director at Banco Fator in Sao Paulo.

"In the long run, though, a healthy American economy is good for the region as a whole, so if letting the dollar weaken fuels U.S. economic growth, it could become a factor here."

In Brazil, Latin America's biggest economy by far, the real BRBY has lost ground against the dollar this week, but traders say the pullback is more the result of profit-taking than mounting jitters in global currency markets.

Despite having weakened slightly in recent days, the real has firmed a lofty 17 percent against the dollar so far this year, bolstered by the new left-leaning government's commitment to tight fiscal policy and long-sought economic reforms.

"If anything, the dollar's continued slide (against the euro and yen) may cause the real to either keep appreciating or at least consolidate its gains," said Christian Stracke, head of emerging markets strategy at research firm CreditSights.

CHILE LOOKS TO BRAZIL

Other regional currencies often look more to Brazil than to Wall Street for direction. Like the real, the Chilean peso CLP= has backtracked in recent days as investors locked in gains after a two-month rally.

But with the Chilean economy on the upswing, economists say the peso is likely to pay scant attention to the strong dollar debate unfolding in the United States.

Even in Mexico, which sends 80 percent of its exports to the United States, few market watchers seem to be shivering at the prospect of the U.S. abandoning its strong dollar policy.

"Frankly, we don't think the United States can afford to have a weak dollar because it needs foreign financing to cover its current account deficit," said Ramon Hernandez, deputy director of economic analysis at Ixe brokerage in Mexico City.

The falling dollar is sure to be felt even less in Venezuela, where the left-wing government of President Hugo Chavez is currently holding the bolivar VEBFIX= at a fixed official rate of 1,600 to the greenback.

Further south in Argentina, where the peso ARSB= has rallied more than 16 percent in the year-to-date, investors are more concerned about the future economic policy of President-elect Nestor Kirchner, who has yet to show all his cards to the market.

"I don't think we're going to see much volatility in the currency market," noted Marcelo Barreiro, a trader at Puente Hermanos brokerage in Buenos Aires.

Granma

• International Peace Workshop convened in Havana

BY ORLANDO GOMEZ BALADO

PHILIP Agee - director of the Internet travel agency Cubalinda and a former CIA official from the 1950s to the 1970s – and Orlando Fundora, president of the Cuban Movement for Peace NGO announced the decision to organize a weekly International Peace Workshop in Havana from May 26 until October.

The representatives explained to the national and international press that the principal aim of the event – to which the "whole world" is invited – is to allow specialists on the subject to directly explain in English the current situation regarding the U.S. government’s threats of aggression against Cuba.

Before answering journalists’ questions, Agee affirmed that he didn’t believe the recent expulsion of 14 Cuban diplomats in the U.S. had anything to do with espionage: it was simply another pretext to justify toughening Washington’s policy towards the island. He added that he expected additional and even more severe measures against the Cuban people, including an intensification of the blockade that this small and dignified country has suffered for more than 40 years.

The former CIA official also recalled how, in the past, that agency manipulated civil organizations (political parties, trade unions, and groups of business people, intellectuals, students, women, religious communities and the media) in order to provoke wars against alleged enemies of U.S. interests, and through such campaigns had managed to topple governments in nations such as Guatemala, Brazil, Ecuador, Chile, Guyana; as well as last year’s attempted coup in Venezuela.

With respect to Cuba, he commented that the same methods are being applied in order to encourage and support civil groups opposed to the Cuban government and the Revolution. As an example, he mentioned the so-called independent journalists, independent libraries and civil rights activists, stating: "they are not, nor were they ever, independent in any sense whatsoever."

Agee added that he believes the escalation of tension by the U.S. government against Cuba is preparatory for a war against the country.

To register for the International Workshop for Peace in Havana, go to the www.cubalinda.com website, where all the necessary information is available.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Tuesday, May 20, 2003 By: Patrick J. O'Donoghue

UK Foreign Affairs Latin American Department chief, John Drew has met Venezuelan Executive Vice President Jose Vicente Rangel to discuss the political situation and trade openings. 

Drew, who was accompanied by UK Ambassador John Hughes, says Tony Blair's government has great interest in Venezuela ... Rangel's vision of Venezuela has helped him understand better the process of dialog based on the 1999 Constitution, especially the recall referendum process. 

Avoiding the pitfalls into which his predecessor Ian MacShane hopelessly fell during the April 11, 2002 coup attempt, Drew insists that the British government respects Venezuela's political process, which is the exclusive reserve of Venezuelans. 

Drew also told journalists that he is optimistic about Venezuela's future and that he would personally invest in Venezuela. if he were a rich man. Although he did not elaborate on UK business interests in Venezuela, he did reaffirm the UK's interest in taking part in joint ventures in natural gas projects. "Venezuela is one of the most interesting and important countries in the region and I return to the UK with a wider vision of what is happening here."

Reuters, 05.20.03, 3:14 PM ET By Ana Isabel Martinez

CARACAS, Venezuela, May 20 (Reuters) - Venezuela's currency control board said on Tuesday the agency had removed several officials from their posts after they were suspected of illegal practices in the allocation of U.S. dollars.

Edgar Hernandez, president of the state foreign exchange board Cadivi, told Reuters in an interview the agency planned to open more investigations into its staff to root out corruption. "We have changed three officials, without proof but under suspicion ... we will substitute all those about whom there are any doubts," the retired army captain said.

But Hernandez, who backed Venezuelan President Hugo Chavez when he launched a botched coup bid in 1992, admitted that it was difficult for the board to prove illicit acts and graft.

Accusations of corruption in Cadivi have recently surfaced after businessmen who applied to the currency board said they were approached by mysterious middlemen offering to help them access dollars. The "fixers" offered to cut through the red tape for a 12 percent commission.

Hernandez did not say whether the officials were transferred to other posts or were fired from Cadivi, which was created nearly four months ago to manage the supply of foreign currency to the private sector.

The Cadivi chief said the agency constantly monitors the bank accounts of its staff to check for unexplained deposits that could signal corruption.

"We are going to start a special operation to monitor our staff," Hernandez said.

FEW DOLLARS FOR THE ECONOMY

Legal access to foreign currency has been all but nonexistent since the controls were implemented at the beginning of February to cap dramatic capital flight and halt a sharp depreciation in the value of the local bolivar currency.

Many private local firms have been battered by the lack of foreign currency and others are facing bankruptcy because the government does not consider their products to be a priority for access to much-needed foreign currency.

Hernandez said Cadivi had authorized $205 million so far for priority goods, of which only $12 million has been handed over to companies. The economy has been starved of hard currency since Jan. 22 when the government closed the currency markets to prepare for the new controls.

The amount of dollars released in the last few months compares sharply with the $40 million to $60 million that flowed daily before the curbs were implemented. Venezuela imports about 60 percent of its goods and materials.

The lack of dollars has fostered a thriving black market which has oscillated between 2,100 bolivars and 2,400 bolivars to the dollar. The official fixed rate is 1,600 bolivars to the U.S. greenback.

Opponents of Chavez say that the government is using the currency controls to suffocate his political foes and bludgeon the private sector leaders who took part in a two-month strike that failed to remove the leftist leader from power.

The Courier-Mail From correspondents in Panama City 21may03

A DONATION from a businessman has rescued Venezuela's entry in this year's Miss Universe contest. Media magnate Gustavo Cisneros, head of the Cisneros Group, has offered to pay the costs of Mariangel Ruiz after Venezuela's organising committee announced it could not afford to send her to the event in Panama.

Since 1979, Venezuelan women have won four Miss Universe titles, five Miss Worlds and three Miss Internationals.

Cisneros said: "The historic brotherhood between Panama and Venezuela obliges us to make our best effort so that this beautiful girl can come here to demonstrate once again the beauty and intelligence of the Venezuelan woman."

The chief of the Miss Venezuela Organisation, Osmel Sousa, said last week that tight foreign exchange controls had made it difficult to obtain the $US80,000 ($122,520) needed to send Ruiz to the event.

The Cisneros Group owns Venevision television, which had announced that Miss Venezuela would not go to the Panama pageant for "political and economic reasons". The government had no comment.

Cisneros said: "(Despite) the real difficulties that Venezuela is experiencing, our decision (to send Miss Venezuela) is the fruit of our commitment to the public."

Earlier this year, Cisneros accused Venezuelan President Hugo Chavez of restricting press freedoms after regulators began proceedings to fine or revoke the licences of two television stations.

Chavez has alleged that Cisneros is trying to destabilise the government.