Venezuelan finance minister does not rule out substitute for Sitme

In a televised interview, Venezuela's Finance Minister Jorge Giordani did not rule out the possibility of creating an alternative mechanism to the Transaction System for Foreign Currency Denominated Securities (Sitme). Giordani added that "such things are under consideration permanently."

The finance minister stated that Sitme "had to come to an end" because "it was fed inadequately through  two sources: government and state-owned oil company Pdvsa's indebtedness."

Giordani admitted that Venezuela's devaluation will have inflationary effects, and indicated that the rise in the price of some products had been reported prior to the adoption of the economic measure. "We have been hit (by inflation) in the latest months, namely October, November, December, and even January..."

"Inflation is associated with a problem in domestic output; it is vital to produce because there is demand," he noted.

Giordani asserted that he has been in contact with Venezuelan President Hugo Chávez, particularly last December 28 when Chávez called him asking specific questions about all the economic actions.

Translated by Jhean Cabrera