Central bank's Merentes named new Venezuela finance minister

CARACAS: President Nicolas Maduro replaced Venezuelan Finance Minister Jorge Giordani on Sunday, appointing central bank chief Nelson Merentes in his place two days after being sworn in as the late Hugo Chavez's successor.

It will be the third stint as finance minister for Merentes, a mathematician by training who is seen as a more pragmatic economist than his ideologically driven counterpart Giordani, a Marxist academic who was nicknamed "the Monk."

"I've great faith in Nelson Merentes. We've known each other for many years," Maduro said in a nationally televised address.

In his speech, he also confirmed Oil Minister Rafael Ramirez, Defence Minister Diego Molero, Foreign Minister Elias Jaua and Vice President Jorge Arreaza in their current roles.

Merentes faces private sector complaints about lack of access to hard currency, persistent shortages of basic goods from flour to medicines, slowing growth, and one of the highest inflation rates in the Americas.

Consumer prices rose 7.9 percent in the first three months of 2013 alone, the central bank said last week.

"We need to control inflation, the speculative factors that influence prices, ensure that there are more domestic products, and an economy that can move," Maduro said.

The economy grew 5.6 percent in 2012, but most private economists expect that to slow this year as the government pares back after heavy state spending last year that was a key driver of the economy and helped the ailing Chavez win re-election.

Meanwhile, annual inflation may head toward 30 percent thanks to a currency devaluation and expanding money supply.

Giordani, who had been finance minister since 2008, was seen as one of the architects of the OPEC nation's complicated system of price and currency controls.

He will now become planning minister, a senior position in the economic Cabinet that Giordani held on and off in Chavez's government.


Merentes, who has been president of the central bank since 2009, completed a PhD. in mathematics in Budapest in 1991 before returning to Venezuela as a university professor.

"I think Merentes' pragmatism is positive. He is one of the best options they have," said financial analyst Henkel Garcia of Econometrica.

Maduro has vowed to continue Chavez's hardline socialism. Ecoanalitica director Asdrubal Oliveros said no one thought the move would lead to a change in Venezuela's leftist model.

"But the weakening of Giordani is positive," Oliveros said.

Voters were showered with state spending in 2012 as Chavez sought re-election, financed in part by billions of dollars in bond issuance and loans from China.

Many private economists expect to see the economy grow by 2 percent or less this year when the administration slows spending, as it normally does after presidential races.

The government maintains growth projections of 6 percent for this year, and Maduro's allies dismiss talk of a slowdown as a politically motivated smear campaign.

A veteran of Venezuela's polarized political scene, Merentes ran a polling organisation in between government jobs that produced data usually favouring Chavez, who died on March 5 after a two-year battle with cancer.

Opposition leader Henrique Capriles has refused to recognize Maduro's narrow win in an April 14 election triggered by Chavez's death, and alleges that there were thousands of voting irregularities. He was dismissive of Maduro's new Cabinet.

"Members of the 'for now' government are being announced," Capriles said on Twitter. "Result: more of the same." - Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3


Next In Business News

Pharmaniaga appointed sole distributor of Baraka in Malaysia
FBM KLCI likely to trade higher next week
Aramco agrees US$12.4bil deal to sell stake in pipelines
Solar in Malaysia - Challenges, and too much of a good thing?
CPO futures to see volatile trading next week, eyes on MPOB data
Pfizer, BioNTech seek US emergency nod for COVID-19 vaccine in adolescents
Eyes on next generation as Singapore succession is thrown into question
Oil price falls, ends week about 2% lower on supply increase, new lockdowns
BlackRock, Mustier's blank-check firm eye Credit Suisse fund management arm
GLOBAL MARKETS-S&P 500, Dow scale new heights, Treasury yields rise on strong inflation data

Stories You'll Enjoy