Venezuela devalues currency

Venezuela devalues currency Caracas: Venezuela is devaluing its currency by 31.7 percent, though the old exchange rate will be honoured for businesses and individuals with pending applications for dollars, Planning Minister Jorge Giordani said Friday.

One dollar will buy 6.30 bolivares under the new rate, up from 4.30 bolivares previously.

Venezuela's food, retail, media, telecoms and health sectors will be able to obtain dollars from the government at the old rate for some time, Giordani said, holding up the devaluation decree signed by ailing President Hugo Chavez.

Other industries may also be eligible for dollars at the more favourable rate, the minister said.

Chavez's leftist government imposed currency controls in 2003 following an opposition-led general strike that caused economic output to plummet.

The devaluation will be accompanied by greater flexibility in the requirements faced by Venezuelan exporters who need dollars for their operations, central bank chief Nelson Merentes said Friday.

Instead of having to repay the central bank 70 percent of the dollars they receive, exporters will be required to return 60 percent of the amount, he said.

Merentes also announced a liberalization of regulations for foreign-currency-denominated bank accounts in Venezuela, which are used mainly by people receiving pensions, remittances or other remuneration from abroad.

IANS