Chavez turns down opposition criticism on currency devaluation

"These people were born in Venezuela, but have no Venezuelan heart and homeland," the head of state said in reply to criticism by opposition parties, alleging that devaluation will lead to rising inflation that topped 25 percent last year, price hikes for food, consumer goods and services and will considerably cut down living standards.

The Venezuelan government took a decision on Saturday to devalue the bolivar and to introduce on Monday a dual exchange rate for the national currency unit to the dollar and other foreign exchange currencies. The rate will increase from 2.15 to 2.6 bolivars to the US dollar for import by the state sector of "socially important goods", above all foodstuffs, medicines, domestic electronic appliances and medical equipment.

The dollar will equal 4.3 bolivars for importers of building materials, metals, electrical domestic appliances, tobacco goods, liquors, cars, etc.

The strict regime of state currency regulation was introduced in the country in 2003. The bolivar's exchange rate remained unchanged since 2005, despite a high inflation rate. In the opinion of authorities, the devaluation is to boost the development of the industrial economic sector, export of goods and services, Kazinform cites Itar-Tass. See www.itar-tass.com for full version.