Venezuela bolivar slips on 50th day of strike

www.forbes.com Reuters, 01.20.03, 1:32 PM ET

CARACAS, Venezuela, Jan 20 (Reuters) - Venezuela's bolivar currency slipped 2.2 percent against the U.S. dollar on the interbank market Monday as an opposition strike against President Hugo Chavez entered its eighth week with no solution in sight.

The interbank bolivar rate <VEB=><VEB2=> closed at an average of 1,815 bolivars to the dollar Monday, 40 bolivars down from Friday's interbank end-day average of 1,775 bolivars.

Traders said demand for the U.S. greenback continued to be high as companies sought to protect their savings on the 50th day of the grueling strike which has slashed oil output and exports in the world's No. 5 petroleum exporter.

Strike leaders are demanding that left-winger Chavez, who was elected in 1998 and survived a coup in April, resign and hold early elections. He has vowed to beat the strike.

The Central Bank, which last week suspended its previous system of daily dollar auctions, Monday offered between $60 million and $70 million through its foreign exchange desk, but this was not enough to cover total demand, traders added.

"Corporate demand was pretty strong, clients were seeking to put everything they could into dollars so as not to lose their investments," one trader said.

Measured by the Central Bank, the bolivar has lost 20.2 percent of its value against the dollar since the start of the year up until Friday.

The official Central Bank reference rate <VEBFIX=> had closed at 1.755/1.758.50 bolivars to the dollar Friday, 41.25 down from Thursday's close.

Since the strike started Dec. 2 up until Friday, the bolivar has lost 24.7 percent of its value against the U.S. currency.

Nobel Peace Prize Winner and former U.S. President Jimmy Carter Monday joined Organization of American States Secretary General Cesar Gaviria in trying to salvage faltering peace talks between Chavez's government and its foes.

The talks are hanging in the blanace after the populist president said at the weekend his government was considering pulling out of the OAS-brokered negotiations.

Chavez condemns leaders of the strike as "terrorists and fascists" trying to overthrow him, and says he will not negotiate with them.