CARACAS, (Reuters) – Venezuela’s President Nicolas Maduro named an army general as the new finance minister in a reshuffle of his economic team yesterday and said there would be no currency devaluation this year despite a soaring black market for dollars.
“We’re going to keep the dollar at 6.3 (bolivars) for the whole year and far beyond that,” Maduro said in the annual presidential address to the OPEC nation’s parliament.
Most economists say a devaluation is long overdue to rectify distortions in Venezuela’s economy, including illegal trading of greenbacks at 10 times the official rate.
That situation has been a factor behind inflation of 56.2 percent last year – the highest in the Americas – and shortages of goods from toilet paper to flour as businesses struggle to access enough U.S. dollars.
Maduro, a 51-year-old former bus driver who has stayed loyal to his predecessor Hugo Chavez’s socialist policies, said the economy was his No. 1 priority and again blamed capitalist foes for an economic “war” against him.
He vowed that foreign exchange mechanisms would change, with state currency board Cadivi to be absorbed by another body. And he vowed an “iron fist” against those who siphon dollars at the official rate to make a profit on the black market.
Maduro surprised his audience by announcing that public banking minister Rodolfo Marco Torres, a military general who participated in Chavez’s 1992 failed coup attempt, would replace Nelson Merentes as finance minister.
“He’s held many big posts for a long time and has not been tainted (by corruption),” said one source who knows the incoming finance minister. “He’s also good at negotiating and has good relations in the bank sector.”
Merentes, considered a pragmatist compared to the more hardline factions in the ruling Socialist Party, is to return to a past role as president of Venezuela’s central bank.
That makes three changes at the central bank since Maduro won an April 2013 election to replace Chavez.
“He’s going backwards and forwards. He’s not clear what to do,” said local economist Asdrubal Oliveros.
The president said Rafael Ramirez, one of Venezuela’s most powerful officials and a protege of Chavez during his 14-year rule, would keep his roles as head of state oil company PDVSA, minister of energy and vice president of economic affairs.
Maduro gave few details of his planned changes to the currency control mechanisms, though he did announce that a new body, the National Center of Foreign Commerce, would assume the role of Cadivi, which is widely discredited due to corruption.
