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EDITIONS
 Thursday, 9 January, 2003, 22:29 GMT
Venezuelan bank strike hits currency
1,000 bolivar note
The bolivar: Under pressure
Venezuela's currency has lost further ground, as bank staff joined the five-week-old general strike in opposition to President Hugo Chavez.

The bolivar ended down 5.3% against the US dollar on Thursday, closing at a rate of 1,594.75 to US$1, as measured by a central bank average.

The slide came despite an injection of $50-80m into the market to support the bolivar, which lost 5.7% of its value in trade on Wednesday after the bank strike was announced.

Demand has soared for US dollars over fears that the government might devalue the bolivar to balance its budget, hit as the strike reduced oil and tax revenues.

Savers wanted dollars ahead of the shutdown in case the bolivar fell further before banks reopen next week.

The bank workers strike, which left many branches closed, has been backed by Provincial Bank Workers' Union and Industrial Bank of Venezuela's union.

But the action defies a ruling by the Venezuelan banking regulator.

Economy in trouble

The bolivar has now lost 17% of its value since the general strike began on 2 December.

Protesters have promised to maintain the strike until Mr Chavez, blamed for wreaking political and economic damage, steps down and agrees to early elections.

The strike has paralysed Venezuela's oil industry, which supplies 13% of US oil needs and funds half the government's budget.

On Tuesday, Finance Minister Tobias Nobrega said the strike had cut oil and tax revenues by up to $2.2bn.

The government has said it may cut its $25bn budget for 2003 by 10% and has halved growth forecasts.

And oil minister Felipe Perez has warned that oil production, which is thought to be down to about 400,000 barrels per day from 3 million before the strike, may not return to normal until May.

The strike, combined with US threats of war on Iraq, sent international oil prices above $30 per barrel.


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08 Jan 03 | Americas
07 Jan 03 | Business
05 Jan 03 | Americas
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