UPDATE 1-Chavez says new forex rate not far above 4.3/dlr

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CARACAS, May 20 (BestGrowthStock) – Venezuela’s new foreign
exchange rate to be set by the Central Bank should not be much
above the highest current official rate of 4.3 bolivars to the
dollar, President Hugo Chavez said on Thursday.

The central bank is taking over a “parallel” currency
market, previously in private hands, where the bolivar had
bombed to more than 8.0 to the dollar this year.

The bank is to establish a new band for the bolivar,
depending on local supply and demand, and using international
bond prices as a reference, officials have said.

“It won’t be much above 4.3, right?” Chavez said in a
televised meeting with his economic team.

“It will be around there, very close.”

This week’s state takeover of the hitherto free-floating
“parallel” market effectively creates three officially
controlled currency rates in the South American OPEC member
nation.

The state provides dollars at 2.6 bolivars for essential
items like medicines, and also has had another rate of 4.3
bolivars since a January devaluation.

The “parallel” rate had sprung up due to restricted access
to dollars at the other two levels, but now that too will be in
government hands. Analysts predict a black market will spring
up quickly.

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(Reporting by Andrew Cawthorne, editing by Anthony Boadle)

UPDATE 1-Chavez says new forex rate not far above 4.3/dlr