Venezuela forex rate at 1,600 bolivars to dollar-sources

www.forbes.com Reuters, 02.05.03, 6:34 PM ET

CARACAS, Venezuela, Feb 5 (Reuters) - Venezuela's government plans to set a fixed exchange rate of 1,600 bolivars to the U.S. dollar as part of new currency controls aimed at staving off the economic impact of a two-month opposition strike, government sources told Reuters on Wednesday. The Venezuelan currency, which last traded at 1,853 bolivars to the U.S. dollar, plummeted about 24 percent from the start of the year until the government shut down currency trading two weeks ago. The bolivar fell 46 percent against the greenback last year. Venezuela suspended currency trading from Jan. 22 to prepare a strict currency control regime to protect its reserves and the bolivar during the strike aimed at forcing leftist President Hugo Chavez from office. "The rate will be 1,600 bolivars," one of the government sources told Reuters on condition of anonymity. An opposition strike, started on Dec. 2, battered the oil-reliant economy by choking off the petroleum exports that accounts for half of the government's revenues. Officials last week said that the government would begin with a single fixed exchange rate that would be adjusted on a monthly basis and could later move to a dual rate.