www.heraldtribune.com By ALEXANDRA OLSON Associated Press Writer

Venezuela's central bank suspended its foreign exchange trading for a week starting Wednesday to try to keep the country's currency, the bolivar, from further plummeting in the fallout of a 52-day-old strike that has crippled oil exports.

A new foreign exchange policy will be revealed after five business days, the Central Bank and the Finance Ministry said in a joint statement. Central Bank director Domingo Maza would not give more details.

The announcement led to speculation that the government was planning to impose exchange controls to protect its depleting foreign reserves and halt the bolivar's slide, which has lost a quarter of its value this month.

"It sounds like exchange controls are on the way," said Miguel Octavio, executive director of local investment banker BBO Financial Services.

The suspension means that Venezuelans cannot buy foreign currencies for five business days. The government said it would continue to pay its foreign debts.

Exchange controls could help strengthen the bolivar by limiting the amount of dollars that individuals and banks can buy. But they could also hurt businesses that depend on dollars to pay for imported goods. Venezuela's economy is highly dependent on imports - about 50 percent of food is imported.

Business leaders, labor unions and opposition parties launched a strike on Dec. 2 to demand that President Hugo Chavez resign or call early elections.

The strike has slashed Venezuela's oil production by two-thirds - crippling an industry that provides 70 percent of export revenue and half of government income.

The bolivar currency reached a record low of 1,853 to the dollar Tuesday. It has lost 25 percent of the its value since the beginning of the year, after losing 46 percent of its value in 2002. The depreciation has contributed to 30 percent inflation.

Traders said the Central Bank has been injecting up to $70 million a day to protect the currency. Venezuela's foreign reserves stood at $11.05 billion Monday, down from about $12.5 billion before the strike began. Venezuela also has about $2.9 billion in a rainy day fund that absorbs excess oil revenue.

Opposition and government negotiators are studying proposals made by former President Jimmy Carter to end the dispute over Chavez's rule.

The Nobel Peace Prize laureate proposed two plans Tuesday. The first entails general elections and an end to the strike. The second proposal calls for both sides to prepare for a binding referendum on Chavez's presidency in August, the midpoint of his six-year term. Venezuela's constitution allows such a vote.

The first plan would amend Venezuela's constitution to shorten presidential and legislative terms of office and stage early elections.

It calls for the opposition to end the strike and for the government, which has a congressional majority, to move quickly on changing the constitution. Amending the constitution requires the approval of congress and a popular referendum.

A so-called "Group of Friends of Venezuela," a forum of six countries - the United States, Mexico, Brazil, Chile, Spain and Portugal - has been formed to help end the standoff. Diplomats involved in the initiative will hold their first meeting at the Organization of American States in Washington on Friday.

A key point is the fate of workers at Venezuela's state owned oil monopoly. Some 30,000 of 40,000 workers are striking. Chavez has fired more than 1,000. Carter said his proposal would have strikers return to work but let the government prosecute anyone accused of sabotaging the industry.

Chavez was elected in 1998 and re-elected in 2000 on promises to help the country's poor majority, but he has failed to remedy the nation's economic ills.

Opponents blame Chavez's leftist policies for an estimated 8 percent economic contraction in 2002. Chavez blames it on opposition attempts to destabilize the country.

www.forbes.com Reuters, 01.22.03, 9:21 AM ET By Patrick Markey

CARACAS, Venezuela (Reuters) - Venezuela's central bank said Wednesday it was closing the foreign exchange market for five trading days as the government moved to stem capital flight during a crippling seven-week-old opposition strike against President Hugo Chavez.

Venezuela's international reserves have fallen and the local bolivar currency has tumbled 28.5 percent since the strike against Chavez began Dec. 2 in the world's fifth largest petroleum exporter.

"Foreign exchange trading is suspended in the country for five market days," Finance Minister Tobias Nobrega and central bank President Diego Castellanos said in a statement.

The central bank said that during the five-day closure the government would maintain the necessary operations to make public external debt payments.

A government source told Reuters late Tuesday that the cabinet planned to temporarily shut down the exchange market as it studied currency restrictions to stem the sharp decline of the bolivar against the dollar.

But the source, who asked not to be identified, said the government was still not clear on what measures it would introduce. The government said Wednesday that it would establish temporary currency exchange and transfer restrictions, but did not give further details.

"The Finance Ministry is authorized to establish with the central bank temporary measures setting limits and restrictions on the convertibility of the national currency and the transfer of funds abroad," said a government decree published in the official gazette.

The source said Tuesday that the government was not considering a devaluation of the bolivar for the moment.

ECONOMIC "TERRORISTS" The opposition strike, aimed at pressuring leftist former paratrooper Chavez to resign and call elections, has battered Venezuela's vital oil exports, which account for about half of the government's revenues. The oil-reliant economy had already contracted sharply amid growing political conflict.

Opposition leaders say that rather than deliver on his promises to ease poverty, Chavez has wielded power like a dictator and driven Venezuela toward economic ruin.

Chavez, who was elected in 1998 and survived a coup in April, has branded his foes as "terrorists" who are trying to topple his government in an economic coup. He has refused to step down and vows to defeat the strike.

Trade and Production Minister Ramon Rosales said the exchange market measure was introduced to halt what he called "the coup-mongers' attack against our international reserves."

"The aim of this measure is to preserve our reserves which are the only guarantee of Venezuela's recovery after this oil sabotage," Rosales told Reuters.

Venezuela's international reserves have fallen to $11.05 billion, a drop of 7.5 percent so far this year. The government also holds $2.85 billion in its FIEM rainy-day savings fund.

The central bank had been burning through about $70 million to $80 million a day to cover demand in the exchange market, traders say. Officials say that figure has at times surpassed $100 million a day.

The central bank reference rate for the bolivar closed Tuesday down 5.1 percent at 1,849.50/1,853 bolivars to the dollar amid nervous demand for the U.S. currency.

Rattled by political uncertainty, the bolivar has lost more than 24 percent of its value this year alone. Traders had predicted the Venezuelan currency could fall below 2,000 bolivars to the dollar this week as the strike grinds on.

Several ministers and central bank officials had repeatedly denied the government planned to introduce currency exchange controls, citing Venezuela's solid international reserves. (Reporting by Patrick Markey, additional reporting by Ana Isabel Martinez and Silene Ramirez; editing by Phil Berlowitz; Reuters Messaging: pat.markey.reuters.com@reuters.net; 58-212-277-2656; email: pat.markey@reuters.com) (Xtra clients: Click on topnews.session.rservices.com to see Top News pages in multimedia Web format. If you cannot access the pages, ask your IT department to check your Internet firewall settings. For a technical advisory, click on .)

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.

www.ohio.com Posted on Wed, Jan. 22, 2003 From Beacon Journal wire services

CARACAS, VENEZUELA - Fearing their workers are in danger from Venezuela's political violence, many multinational companies are sending them home or suspending operations, or both.

Microsoft Corp. closed two Venezuela offices Monday, saying it could not guarantee employees' safety. The company employs about 85 in Caracas and six in the western city of Maracaibo.

Since Venezuela's opposition called a strike Dec. 2 aimed at ousting President Hugo Chavez, oil companies such as ConocoPhillips and France's TotalFinaElf have withdrawn nonessential expatriate staff. Some fast-food franchises such as McDonald's, Burger King, Wendy's and Subway have closed.

The number of companies and workers involved isn't known, but departures accelerated after the U.S. Embassy and other missions issued strong safety warnings in December. The U.S. Embassy sent off its nonessential staff and closed its commercial attache's office.

The strike has reduced the nation's oil output and contributed to a surge in global oil prices to two-year highs. Crude oil for February delivery rose 70 cents, or 2.1 percent, to $34.61 a barrel on the New York Mercantile Exchange, the highest closing price since Nov. 29, 2000. Prices rose as high as $35.20 a barrel in the last 15 minutes of trading.

Venezuela was producing about 3 million barrels a day before the strike began Dec. 2; the Lake Maracaibo port produced 1.7 million barrels of that. Current production nationwide is about 1 million barrels a day, according to the government, or about 650,000 barrels a day, according to strikers.

Dozens of Venezuelans have been killed in political violence since an April coup briefly toppled Chavez. Six have been killed since the strike began.

None of the companies has announced it is withdrawing for good. Venezuela is the world's fifth-largest exporter of crude, and it has accumulated $20 billion in investment in its natural gas, oil and oil-related-services sector in the past 10 years.

I think (oil companies) are assessing the situation and trying to stay as invisible as possible,'' said Larry Goldstein, president of the New York-based Petroleum Research Foundation. Politically, they don't want to be seen as choosing sides right now. Some have substantial investments they have to protect.''

Many local workers are striking, and others can't get to work because of gasoline shortages. Political protests occur daily and often end in violence. Financial transactions can be hard to complete because Venezuelan banks are operating only three hours a day.

Ricardo Tinoco, a spokesman for Ford Motor Co. in Venezuela, said operations have been suspended since early December. He said all employees were told to come back next week. ``But in light of the current situation, the lack of fuel and the fact that many of our suppliers are on strike, we don't see how we'll be able to start operations next week as planned,'' he said.

Ford has a large assembly plant in Valencia, 70 miles west of Caracas.

On Friday, Venezuela's military raided a Coca-Cola affiliate bottler and another bottler belonging to Venezuela's largest food and drinks producer, Empresas Polar. Both companies denied hoarding goods.

The Venezuelan American Chamber of Commerce condemned the raids as ``a grave rupture of the state of law.'' It warned more than 1,000 affiliates that the army could commit more abuses and urged the affiliates to report violations.

www.miami.com Posted on Wed, Jan. 22, 2003 BY FRANCES ROBLES frobles@herald.com

CARACAS - Former president Jimmy Carter presented warring sides of Venezuela's political crisis two ways out of the country's 51-day strike Tuesday, for the first time offering a concrete proposal to end a crippling eight-week work stoppage and offer a presidential election.

Carter's two proposals would oblige the opposition trying to oust Venezuelan President Hugo Chávez to lift the nationwide strike that has strangled the state-oil company Petróleos de Venezuela, S.A., and closed businesses around the nation. In one plan, the government would in turn agree to a binding recall referendum to take place Aug. 19. The other would pave the way for a constitutional amendment to cut the assembly and president's terms from six years to four -- effectively ending them now -- and call for new elections before August. Although faster, this second plan would first require the opposition to collect signatures for a nationwide vote on the constitutional amendment.

While both ideas have been publicly debated here for weeks, it was the first time that striking business, oil and labor leaders have been offered a deal in exchange for ending the strike. Carter, a winner of the Nobel Peace Prize, characterized Chávez's reaction to the proposals as ''positive.'' However, Chávez was expected to meet with his Cabinet before formally accepting.

Opposition leaders had no immediate comment.

''Without being presumptuous, I don't see any alternative,'' Carter said in an interview with four U.S. newspapers. ``The alternative is continued chaos.''

An alliance of business, labor and oil interests went on strike here Dec. 2 in a mission to topple Chávez, a former army officer whose consolidation of power and leftist policies have convinced a majority of the nation that he plans a quasi-communist regime. But the strike lasted much longer than anyone anticipated -- and so did Chávez's grasp on the presidency.

Despite talks that have dragged on for months, the president has adamantly refused to offer early elections, arguing that doing so would violate the nation's constitution. The only legal answer, he has said, is a recall referendum in August. But opposition leaders -- and the millions of Venezuelans who support them -- reject the idea of an August referendum, because they are deeply skeptical that Chávez would allow it to take place.

Carter said the proposal would guarantee international oversight by the recently formed ''Group of Friends'' that joined in on peace talks here.

The group -- Brazil, Chile, the United States, Portugal, Spain and Mexico -- would assure that there would be ''no trickery,'' Carter said.

The plans were presented separately Tuesday evening to the six negotiators on each side. Written responses are expected this week.

POSITIVE OUTLOOK

''It was constructive,'' said the Carter Center's vice president for conflict resolution, Matthew Hodes, a former Miami-Dade County prosecutor who presented the proposals. ``They are seriously considering these options. The idea was to move things forward.''

The proposals drafted by the Atlanta-based Carter Center would represent important concessions for both sides: Chávez would have to offer himself up to the public's will at the ballot box, and the opposition would have to accept a delay.

''In the end, the voters will decide,'' Chávez said after his breakfast meeting with Carter. ``I have even said that instead of blocking pipelines, sabotaging gasoline or milk for the children, they should put themselves to work on these ideas.''

The plans also involve amnesty for striking oil workers and criminal charges for oil workers accused of sabotage.

The government has accused striking workers of damaging oil systems to make it harder for strike-breakers to work.

''My opinion is both sides want to reach an agreement and an end to the impasse which has destroyed the nation's economy and social structure,'' Carter said after meeting with Chávez for two hours. ``I don't think anyone imagined the strike would last 50 days, and no one wants to see it last 70 days or 100 days.''

Meanwhile, getting gas here often takes days, and food staples such as milk and flour are beginning to run out. One protester was killed at a rally outside Caracas on Monday, making him the sixth to die since the strike began.

NO OTHER WAY OUT

''Why would Chávez accept? Because the situation is very serious,'' said Eduardo Fernández, president of a leading political party who met with Chávez this week. ``He can't govern.''

And while the strike has slowly eased on a commercial level, transportation workers said Tuesday that they planned to join the work stoppage this week.

''We consider that the way out has to be constitutional, democratic and peaceful,'' said labor leader Carlos Ortega, a key strike figure. ``Let's wait to see what that way out will be.''