Venezuelan central bank chief rules out single exchange rate

Venezuelan Central Bank President Nelson Merentes on Wednesday ruled out the possibility of implementing a single foreign currency exchange rate, citing the current hostile economic climate.

"We are submerged in an (economic) war ... a war against the ( economic) system we are developing, that's why we have to be prudent to achieve the social and economic objectives we have established," Merentes said in a televised interview.

The remarks came one day after the government announced a more flexible three-tiered exchange system designed to protect key sectors of the economy, while easing some currency restrictions, a move to revive the country's economy struggling with plunging oil prices.

The new system maintains a rate of 6.30 bolivars to the U.S. dollar for imports for strategic areas, such as food and health, a rate of 12 bolivars to the dollar for non-strategic sectors, and a free-floating market rate for private companies and individuals.

The system will allow the Venezuelan government to direct its foreign currency toward the "real needs of the people," Merentes said.

"There are political and business groups that are trying to destabilize our government and that certainly has an impact on the economy and our currency system," he said.

Authorities expected the new system will help stamp out a thriving black market in greenbacks fetching 185 bolivars to the dollar, about 30 times the official rate.

"If the mechanism's dollar rate is very similar to the black market (rate), it makes no sense to resort to the illegal market," he said.

Tight currency controls imposed 12 years ago in this country have been blamed for a slew of economic ills, mainly shortages of goods and stifled growth. Enditem