Venezuela to offer $40 mln daily under currency curbs

www.forbes.com Reuters, 02.16.03, 5:46 PM ET CARACAS, Venezuela, Feb 16 (Reuters) - Venezuela will provide $40 million daily from February for importers, foreign debt holders and tourists under its new strict currency control regime, Planning Minister Felipe Perez said in a statement. The Central Bank will complete the transactions when businesses needing U.S. currency have complied with requirements established by CADIVI, the government's new currency control board, Perez said in a message on a government Website. The minister said the amount of currency available in March would be evaluated when the government had more details about the flow of dollars and the recuperation and finances of state oil firm PDVSA, which has been ravaged by a two-month strike against President Hugo Chavez. Perez said demand during the last two quarters had been around $90 million a day. But the minister said demand for dollars had fallen as the country's production slipped and less imports entered the country. In early February, the Venezuelan government established a fixed exchange rate, tightened access to foreign currency and introduced price controls to offset the economic impact of the opposition strike that cut into vital oil exports. The government has said that the buying and selling of dollars will resume at the start of next week. Businesses have had no official access to U.S. currency since Jan. 22 when the government closed foreign exchange trading to shore up its reserves and the Bolivar currency. Venezuela's economy, battered by recession and the grueling strike, contracted nearly 9 percent during 2002. Economists and opposition leaders have warned that the currency controls will create a huge black market, hike inflation and create shortages of imported goods.