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Sat, Sep 19, 2009 - Page 10 News List

Chavez injects US$5bn into Venezuelan market


Venezuela’s government is injecting US$5 billion into its domestic market, and will increase the supply of dollars at the official exchange rate, Venezuelan President Hugo Chavez said on Thursday.

The steps are being taken as part of a package of 40 economic measures seeking to bolster the country’s economy.

“About 40 decisions on the economic front will be announced to the world in the coming hours,” Chavez told reporters at the presidential palace in Miraflores.

Without detailing all the measures, he said the government had decided to “speed up the delivery of foreign currency” at the official exchange rate of 2.15 bolivars to the dollar. He also said liquidity would be injected into the domestic market.

“I have signed approval for the injection of 10,000 billion bolivars, 5 billion dollars, and we will sell it in a month because liquidity is very high. It is a country with a strong economy,” he said.

Venezuela’s GDP contracted by 2.4 percent in the second quarter of this year, after 22 consecutive quarters of growth.

The second package of measures will be implemented “on October 1 and will seek to produce a reactivation of the economy in the final quarter,” Chavez said.

In March, Chavez announced a series of budget cuts and a raise in the country’s VAT, but ruled out devaluing the bolivar, or raising the price of gasoline, which is the lowest in the world and has not been adjusted in 10 years.

Chavez also said on Thursday that Caracas would expropriate coffee companies that are not functioning “in the state’s interest.”

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