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UPDATE 2-Venezuela announces new finance minister, wage rise

Published 01/15/2010, 09:36 PM

* Names leftist economist as finance minister

* Announces minimum wage hikes

* Aims to firm bolivar on floated market (Recasts, adds details of bolivar)

CARACAS, Jan 15 (Reuters) - Venezuela's President Hugo Chavez on Friday named a new finance minister in a cabinet reshuffle he combined with measures to limit the impact of a sharp devaluation of the bolivar currency last week.

Leftist economist Jorge Giordani, a veteran of Chavez's economic team, will take over as finance minister but keeps his current job as economic planning minister.

Chavez also said the government aimed to strengthen the bolivar to 4.3 on a semi-legal market where it is floated in a move to control and offset inflation after he devalued the currency from a fixed rate peg last week.

Speaking to lawmakers during his annual parliamentary address, Chavez announced a 10 percent minimum wage rise effective from March 1, to be followed by a second, 15 percent rise in September.

Venezuela, which imports 90 percent of its consumer goods, now effectively has three currency rates, two fixed by the government and one floated on what used to be the black market but is now semi-official.

"The dollar is going down and many prices should be marked down. From this point of view we have revalued the bolivar," Chavez said after declaring himself a Marxist. "It's a revaluing devaluation."

The bolivar on Friday firmed to about 5.7 bolivars per dollar from 6.4 earlier in the week after the government sold two $50 million bonds.[ID:nN13221708]

Last Friday, the government devalued its currency, which had been fixed at 2.15 bolivars to the dollar since 2005.

The new official bolivar rates are fixed at 2.6 per dollar for imports of basic items such as food.

Chavez is aiming to bring the floated rate into line with a second rate of 4.3 per dollar for revenue from oil sales and for imports of consumer goods deemed nonessential.

Current finance minister Ali Rodriguez, another veteran leftist, will become the South American oil exporter's electricity minister. His predecessor was fired this week for a chaotic roll-out of planned power outages to save electricity.

Giordani has served off and on as planning minister for most of Chavez's 11 years in power, but his influence over day-to-day economic policy has often been overshadowed by the more powerful position of finance minister.

He is a fierce defender of Chavez's economic policies such as price controls, putting him at odds with business leaders. (Reporting by Frank Jack Daniel; Patrica Rondon and Nelson Bocanegra; editing by Carol Bishopric)

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