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To: Gabriela Neri who wrote (16439)	8/23/1998 3:47:00 PM
From: Alex	Read Replies (1) \| Respond to of 116790

Venezuelan minister admits de facto devaluation CARACAS, Aug 23 (Reuters) - Venezuela's finance minister has admitted that a decision to allow the battered bolivar currency to fluctuate more freely within its current band system was a de facto devaluation. Asked in an interview published Sunday by El Universal daily newspaper whether a Central Bank's announcement Friday on greater foreign exchange flexibility did not amount to ''a sort of devaluation'', Maritza Izaguirre was quoted as saying: ''In fact, there is (a devaluation), but we've always made clear there will be no maxi-devaluation nor foreign exchange controls, which were so difficult to dismantle.'' Following heavy attacks on the bolivar last week spurred by devaluation rumors abroad, the Central Bank insisted there were no plans to modify the currency band system. It allows the bolivar to float 7.5 percent either side of a sliding central rate which depreciates at 1.28 percent per month. However, monetary authorities said the bolivar would be allowed to move more freely, and away from the central parity value. That value was Friday at around 556, according to Reuters' calculations, and the bolivar closed at 575/576 per dollar, down moderately from 573.75/574.75 on Thursday. The Friday finish was still comfortably under the 597 ceiling of the band. Izaguirre reiterated that ''we're working within the band system ... and there may be a speeding up (of the depreciation) within the bands.'' ''The only thing I can say is that I'm not here to devalue'', added the minister, who took up her job in early July following the resignation of her predecessor Freddy Rojas Parra. Fears of a devaluation of the bolivar, which analysts say is up to 40 percent overvalued, triggered the loss of emerging market confidence Thursday and Friday which rattled markets around Latin America. The Venezuelan currency has been undermined this year by a stubborn slump in world oil prices and political uncertainty ahead of presidential elections in December. Oil is Venezuela's mainstay, accounting for more than 70 percent of exports and more than half of government revenues. biz.yahoo.com