Dec. 31 (Bloomberg) -- Venezuela cut in half the amount of dollars it will let people buy when traveling abroad to $2,500, part of a push by President Hugo Chavez to preserve foreign currency reserves as oil exports plunge.

The move will force more people into the free-floating parallel market, where the bolivar trades at 5.5 per dollar, in search of U.S. currency. Chavez pegs the official rate at 2.15 under foreign-exchange controls he imposed in 2003.

The travel allowance reduction, which appeared in the government’s Official Gazette today, is the biggest move Chavez has made to cope with a five-month, 76 percent tumble in oil that has throttled dollar inflows to the South American country. Oil accounts for 93 percent of Venezuela’s exports.

“International reserves are being compromised, and even more so since reserves have turned into a quasi-fiscal fund,” said Miguel Carpio, an economist at Banco Federal CA in Caracas. “This is the first of many measures we’ll see in 2009.”

Standard & Poor’s forecasts Venezuela may have a deficit next year in the current account, the broadest measure of trade, equal to 4.3 percent of gross domestic product after posting a surplus of 12.5 percent of GDP this year.

Venezuela’s benchmark oil price has dropped to under $30 a barrel, the central bank said Dec. 29. That’s at least 76 percent lower than its peak of $126.46 on July 18. The country is also pumping less oil as the Organization of Petroleum Exporting Countries tries to reduce supply and boost prices.

‘Always Painful’

Venezuela had accumulated foreign reserves and expanded imports amid a six-year rally in the price of oil. The unprecedented decline in prices in the past five months helped slow economic growth to 4.9 percent in 2008, the weakest pace in five years, the central bank said Dec. 29.

Reserves have held near October’s record high of $39.2 billion the past two months, halting a surge from $23.3 billion in May 2007, according to central bank data.

Finance Minister Ali Rodriguez said Dec. 19 that a reduction in dollar sales was likely as the country sought to maintain reserves. He declined to rule out a devaluation of the bolivar in 2009, which is predicted by 13 of 14 economists in a Bloomberg survey.

“They have to do something,” Jose Velutini, a director of Banco Venezolano de Credito, said today. “Adjustments are always painful.”

The Foreign Exchange Administration Commission, or Cadivi, as it’s known, sold $47.5 billion this year to importers and travelers through Dec. 26. Currency for credit-cards and cash for travelers make up about 10 percent of the total that Cadivi sells, according to its Web site.

Cash, Travelers Checks

Along with cutting the travel purchase allowance, Cadivi also reduced to $250 a month, from $500, the amount of cash at the fixed exchange rate that Venezuelans can withdraw from foreign banks. The agency cut the amount of travelers checks Venezuelans can buy to 400 euros or $500, from 500 euros or $600.

The new rules also require that travelers have a plane, ship or bus ticket abroad, eliminating the option for them to get currency for trips by car.

Starting tomorrow, new cardholders can’t get Cadivi dollars until they’ve had their cards for six months, the rules say.

The amount of dollars Venezuelans can use for internet purchases remained at $400 after an 87 percent cut last year from $3,000.

The government may become more selective in allotting dollars to importers next year by limiting foreign currency to “priority goods,” like food, medicine and machinery, according to Carpio.

“Traveler allotments can be cut without having a large effect on the economy that is showing symptoms of a recession, but if you start cutting imports, the problem could be aggravated,” Carpio said.

To contact the reporters on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net; Daniel Cancel in Caracas at dcancel@bloomberg.net

Last Updated: December 31, 2008 13:36 EST