President Hugo Chavez asked Venezuela's central bank on Saturday to lower by at least two percent the reserve amount other banks must deposit with the institution so they can help fund more home-building. Speaking at the launch of the "Gran Mision Vivienda" project, Chavez said widespread floods that left tens of thousands homeless late last year made the construction plans a top priority for his socialist government.
"I am asking the central bank to do this because I am the head of state," he said. "The central bank is autonomous, but I am asking it within the framework of the constitution to lower the reserve rate by between 2 and 3 percent."
Under the current law, banks in the South American country have to hold at least 17 percent of their funds with the central bank.
Central Bank President Nelson Merentes said at the launch that if the bank lowered the amount by 2 percent it would free up some $1.5 billion that could be used for home-building, while a 3 percent reduction would equate to about $2.3 billion.
Directors at the central bank are expected to decide on Chavez's request next week.
Venezuela has an estimated housing deficit of some 2 million homes that is increasing by some 200,000 units a year. Chavez said the problem could only be solved through socialism, and that "Gran Mision Vivienda" would aim to build 2 million new homes over the next seven years.
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