CARACAS, Aug 16 (Reuters) - Venezuela's President Hugo Chavez said on Sunday he was preparing measures to stimulate the OPEC nation's flagging economy as well as ways to reduce a widening breach between the official and black market currency rates.
Chavez said his Finance Minister Ali Rodriguez was looking at the best way to strengthen the bolivar currency on the unregulated and tolerated black market.
"We are preparing economic measures, not only about that (currency) -- how to maintain the stimulus in the economy, investment, foreign reserves, oil, industry, etcetera," Chavez said on his weekly television and radio show.
With vital oil income tumbling at the start of the year, Chavez in February cut Venezuela's spending, reduced the average oil price estimated in the budget, raised sales tax and authorized more borrowing to avoid a fiscal deficit.
The economy grew just 0.3 percent in the first quarter of the year, and economists say second quarter figures due next week could well show an economic contraction.
Chavez did not give more details about the timing or content of the economic measures being prepared.
Chavez's socialist government controls the supply of greenbacks at the official rate of 2.15 to the dollar and made them harder to get hold of after oil income tumbled this year -- pushing businesses to the parallel market where the dollar is now sold for close to 7 bolivars.
Venezuela last year brought down the black market price to just over 3 bolivars to the dollar by issuing dollar denominated debt that could be bought with bolivars and sold in a secondary market.
The government has so far resisted economists who say the government needs to devalue the bolivar.
Top officials say the parallel dollar price should be between 4 and 4.5 bolivars and that the government could achieve this by intervening in the market.
(Reporting by Frank Jack Daniel; Editing by Richard Chang)