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By Eyanir Chinea and Andrew Cawthorne
CARACAS, Jan 23 (Reuters) - Venezuela's benchmark bonds fell to two-year lows on Thursday reflecting market disappointment that President Nicolas Maduro's revamping of 11-year-old currency controls did not go far enough.
The global 2027 bond and another closely watched paper, state oil company PDVSA's 2022, dropped about 2.0 percent each to bid at 68.944 and 83.625, respectively - their lowest levels since November 2011.
Under pressure to fix economic ills ranging from the highest inflation rate in the Americas to shortages of bread and milk, Maduro's socialist government announced on Wednesday that hotly sought U.S. dollars would now be traded at two different rates.
The existing official rate of 6.3 bolivars to the U.S. dollar will be maintained for goods in the health, food and other sectors deemed essential for national well-being. For other needs a flexible rate currently around 11.3 bolivars will be applied to items including airline tickets, remittances and travel allowances.
While the measures may improve government finances and partially bridge a huge gap between the official and black market rate for dollars, they fell short of private sector exhortations for a total overhaul of the currency system.
"They ease but don't resolve the problem, there are some positive elements that attack the disease, but don't end up curing it," Jorge Roig, head of Venezuela's main private business group Fedecamaras, told local media.
Roig, who frequently criticizes the government for sticking with what he views as an outdated and failed model of statist economic policy, urged more measures to attack excess liquidity and combat the inefficiency of state businesses.
Despite the market reaction and a predictable pillorying from Venezuela's opposition leaders, Maduro took to the streets to trumpet the changes as the best way to ensure oil revenues were channeled into social projects.
"I ask for the people's support for the actions I'm taking and that I'm going to take in coming weeks," he told a rally in Caracas, blaming speculators and con men for stealing billions by obtaining dollars at the official rate under false pretenses and then flipping them on the black market for huge profit.
The black market rate for the dollar on Thursday was between 69 and 79 bolivars per dollar, according to prices quoted on web sites.
The government admits that currency board bureaucrats have been conniving with fraudsters to sell dollars to phantom companies, but it continues to blame the problem on Venezuela's traditional business elite and right-wing politicians.
"We are not going to give one dollar more to any of the fascists' briefcase companies, however much they cry and stamp their feet," Maduro said, to cheers from supporters.
Critics say most of the dollars must have gone to those with good connections to "Chavismo," the movement named for Maduro's predecessor, Hugo Chavez, the fiery leftist who died last year of cancer after a 14-year rule trying to root socialism in Venezuela.
"It's the government that keeps the dollars and decides who to give them to. The corrupt one here is the one handling the dollars," opposition leader Julio Borges said, demanding to see a list of those given preferential-rate dollars.
"The country woke up to a devaluation. ... From today, every Venezuelan's salary has been cut in half," he said.
Senior economic officials insisted that only 20 percent of Venezuela's dollar needs, or around $11 billion annually, would be distributed at the rate of the central bank's Sicad auction, currently at 11.3 bolivars.
About 80 percent will remain at the 6.3 level, they said, meaning the change was not as big as some were decrying.
Since winning election last year after the death of Chavez, Maduro has vowed to maintain his legacy of generous social spending and firm regulation of private industry.
But macroeconomic problems have been a constant during his nearly one-year rule, including annual inflation of 56 percent and embarrassing shortages of products from toilet-rolls to church communion wine,
Critics say those problems illustrate the bankruptcy of the "Chavista" model, while the government insists a "war" is being waged against it by wealthy opponents deliberately sabotaging Venezuela's economy to bring down Maduro.
The government plans to publish on Friday a law to limit businesses' profit margins to 30 percent.
"These latest announcements show officials are slowly moving towards more necessary policy adjustment," Siobhan Morden, Latin American analyst with New York-based Jefferies, wrote. "However, the adjustment appears too gradual to have any meaningful impact on stagflation and the external/fiscal imbalance."
Venezuela, with a population of 29 million, has the world's largest oil reserves.