Venezuela central bank cuts discount rate to 36 pct

Forbes.com-Reuters, 04.14.03, 9:44 AM ET

CARACAS, Venezuela, April 14 (Reuters) - Venezuela's Central Bank has lowered its discount rate for local banks seeking to borrow money to meet reserve requirements from 39 percent to 36 percent, the bank's Web page said Monday.

The discount rate cut was effective April 10. The Central Bank on Feb. 11 had lowered the rate to 39 percent from 42 percent.

The latest reduction came as leftist President Hugo Chavez's government continued to apply tight currency controls and price curbs to shore up international reserves and the country's bolivar currency.

The government put the controls, including a fixed exchange rate, in place in early February after a two-month opposition strike battered the economy and disrupted the oil exports that account for half of its revenues.

Access to U.S. currency was suspended for more than two months as the government fine-tuned the new control regime, and it has only recently started making limited amounts of dollars available for essential imports.

Chavez, a populist former paratrooper, has repeatedly called for the Central Bank to lower interest rates to compensate for the hard currency drought and keep inflation -- now running at an annualized rate of 34 percent -- in check.