Venezuela to Introduce Forex Controls -Chavez

asia.reuters.com Wed January 22, 2003 07:29 PM ET

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez said on Wednesday his government would introduce foreign exchange controls to halt capital flight and defend the country's bolivar currency, battered by a seven-week-old opposition strike.

"Together with the Central Bank, in accordance with the constitution, we will establish exchange controls to strengthen our international reserves and defend the bolivar," Chavez said in a speech at a military ceremony in Caracas.

He spoke hours after his government announced it was suspending foreign exchange trading for five market days from Wednesday while it prepared temporary restrictions on currency exchange and transfers to counter the financial damage caused by the strike, now in its eighth week.

Chavez did not give details of the controls being prepared.

Venezuela's bolivar currency has tumbled more than 28 percent during the shutdown and its international reserves have dipped since the crisis began. The strike has slashed oil output in the world's No. 5 petroleum exporter to a fraction of its normal levels.