CARACAS, Venezuela – After suspending the sale of dollars for two weeks because of a crippling general strike, President Hugo Chavez announced a new fixed currency exchange rate to help bolster the country's flagging foreign reserves.
The new policy goes into effect Thursday and fixes the currency rate at 1,596 bolivars to the U.S. dollar, Chavez said during a televised address late Wednesday. Chavez said the freeze on foreign currency trading would end with the establishment of the new system.
The bolivar closed at a record low of 1,853 on Jan. 21, the last day of currency trading.
"We've made the ideal decision for defending the Venezuelan economy and to defend the international reserves," Chavez said. He added that exchange controls would help Venezuela pay its foreign debt.
The fixed rate will be flexible, changing periodically when and how the executive branch and central bank see fit.
Venezuelan businessmen warned Wednesday that plans to restrict access to foreign currency will bury the reeling economy, which is highly dependent on imports.
Venezuela imports roughly half of its food and refined products.
The strike had choked off Venezuela's income from abroad by hobbling the state oil company, by far the nation's biggest exporter.
Chavez on Tuesday lashed out at business leaders who had led the strike, saying the "coup plotters" were stashing billions of dollars abroad.
Analysts say the economic woes caused by the failed two-month strike to oust Chavez will close more than 20,000 businesses and leave 200,000 people jobless.
Strike leader Carlos Fernandez, head of the Fedecamaras business federation, said Chavez was trying to impose control over the struggling private sector, which relies on imports for 60 percent of its supplies and raw materials.
Lope Mendoza, president of the Conindustria business chamber, urged citizens to buy Venezuelan products to keep the economy afloat. "The industrial sector isn't going to please the president, who wants to see a cemetery of businesses," Mendoza said.
Chavez's government suspended dollar purchases on Jan. 22 after the bolivar lost more than 30 percent of its worth during the strike, which began Dec. 2 and ended in all sectors but oil this week.
Oil production was rapidly recovering, Chavez said late Tuesday. He said production would soon reach 2 million barrels per day. Pre-strike production was around 3.2 million barrels.
Foreign reserves dropped by $2 billion in part because the government was spending $60 million a day to prop up the bolivar.
The bolivar last traded at 1,850 to the dollar. On the black market, it's 2,500 per dollar. The decline, in turn, sent inflation past 30 percent, and many economists forecast a 25 percent recession this year.
Finance Minister Tobias Noriega said a fixed rate -- between 1,600 and 1,850 bolivars per dollar -- will be adopted for imports of food, medicines and government transactions.
It wasn't known how many dollars the government would make available to citizens and businesses, what conditions they must meet to buy dollars nor how many dollars they could buy.
Some newspapers speculated Wednesday that citizens would face restrictions on the amount of dollars they can buy for business travel abroad.
Also Wednesday, the government opened an investigation into a fifth private television station, Venevision, for allegedly breaching a broadcast law by supporting the strike.
Chavez accuses Venevision, Globovision, Radio Caracas Television, Televen and a regional station in the southwestern state of Tachira of supporting efforts to overthrow him. The stations could be fined or barred from broadcasting.
On Tuesday, the government said it would investigate whether some radio stations should have their broadcast licenses revoked for airing "violent propaganda."
The government is preparing a media content law governing what and when radio and TV stations can broadcast.
Media owners accuse Chavez of inciting his followers to attack journalists and abusing a law that allows presidents to interrupt private programming to broadcast speeches or government messages.