September 7, 2008 / 5:09 PM / in 11 years

Venezuela may extend bank securities sale deadline

CARACAS, Sept 7 (Reuters) - Venezuela may give banks more time to fulfill an order to sell dollar-linked securities issued by foreign companies to avoid undue pressure on the financial system, the government said in comments reported Sunday.

In May the government of President Hugo Chavez said banks were using the instruments to skirt foreign currency regulations and ordered them to sell within three months.

“That period ends now in September. We are not trying to provoke a critical situation in the banks. Some deadlines could be extended according to the situation of each bank,” Finance Minister Ali Rodriguez said in comments published in the El Universal newspaper on Sunday.

The forced sale of this paper has contributed to the better performance of the local bolivar currency in recent months, although in the last few weeks the currency has lost about 20 percent of its value to trade at around four to the dollar on the parallel market. (Reporting by Patricia Rondon, editing by Maureen Bavdek)

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