Published by Reuters

Venezuela is seeking to consolidate its three-tiered exchange rate system and refinance debt to improve maturity profiles, the economy vice president said in a statement on Saturday, underlining efforts to shore up the country's troubled finances.

Exchange rate unification is seen as a crucial step in easing economic distortions including nagging product shortages and soaring consumer prices that have set the country's economy on a course for stagflation.

Rafael Ramirez, economy vice president and oil minister, told investors at a meeting in London that unifying the exchange rates was a primary component of the government's plan to improve growth.

"We are going to continue holding these meetings, as per President Nicolas Maduro's instructions to reestablish communication with financial markets," Ramirez said.

The 11-year-old currency controls, created by late socialist leader Hugo Chavez, now disburse dollars for 6.3 bolivars for priority goods, at around 10 bolivars through the Sicad auction system, and at around 50 bolivars through the Sicad 2 market.

Maduro acknowledged this week that Sicad 2 was not working as hoped, and promised an improvement in the coming months.

Opposition critics say unification of the exchange rates is a euphemism for a devaluation that will worsen inflation, which hit an annualized rate of 60.9 percent in May.

"The devaluation is only useful as part of a broader toolkit of other policies to rebalance the economy," said Alberto Ramos, a Latin America analyst at Goldman Sachs.

Ramirez added that Venezuela will move money currently held in obscure state-run funds, including the $100 billion Fonden development fund, into international reserves.

That will be welcome news to investors who have complained about lack of transparency in Venezuela's management of its assets.

Ramirez said Venezuela also wants to "reprofile" its debt, which includes nearly $30 billion in maturities due by 2017.

"Just kicking the can down the road by pushing debt service into the future is hardly a sign of pragmatism," added Ramos.

"It is more a sign of growing financial pressure."

State oil company PDVSA, which Ramirez also runs, has obtained a bank loan to pay off $3 billion in bonds due in 2014, a finance industry source who asked not to be identified told Reuters. PDVSA was unavailable to comment on the issue.

More than a decade of currency controls has stifled the country's economy, left businesses struggling to obtain machine parts and raw materials and allowed shell companies to steal billions of dollars through fraudulent imports.

Shortages and high inflation are major gripes and fueled anti-government protests earlier this year that left 42 dead. Authorities blame the problems on an "economic war" waged against it by the opposition.

The president's approval rating is down to around 37 percent, weakening his standing as heir to Chavez.

(Additional reporting by Brian Ellsworth and Patricia Velez; Editing by Eric Walsh)