Venezuela suspends foreign currency trading

abc.net.au Thu, Jan 23 2003 8:06 AM AEDT

Venezuela's Government has suspended trade in foreign currency for five days, according to a joint statement from the Finance Ministry and the Central Bank of Venezuela.

A statement, signed by Finance Minister Tobias Nobrega and Central Bank President Diego Luis Castellanos, and read on state television, says "trade in foreign currency in the country is suspended for five banking days".

The statement says during that period operations related to the payment of public foreign debt would continue.

It also says after the five days, the Central Bank and Finance Ministry would set currency standards.

Venezuela's currency has depreciated more than 30 per cent since the start of a national strike on December 2.

It has plummeted almost 60 per cent since the bolivar was allowed to float in February 2002.

US dollars were worth 1,929.90 bolivars early Wednesday prior to the suspension of trade, down 1.5 per cent from late Tuesday.

Traders say the suspension is motivated by the high demand for cash amid nervousness over the crisis and fears that currency controls would be imposed.

A 52-day old strike aimed at forcing President Hugo Chavez from power has hobbled Venezuela's economy, especially its crucial oil sector.