Jan. 7 (Bloomberg) -- Venezuelan President Hugo Chavez threatened to take control of central bank reserves because of its refusal to make $1 billion available for agriculture loans.

Alejandro Dopazo, Venezuela's deputy finance minister, sought to clarify Chavez's statement, saying in a telephone interview that the administration plans no such action.

Hundreds of Chavez supporters protested outside the central bank's headquarters in Caracas today, calling on the bank's board of directors to transfer the $1 billion to Chavez's administration or resign.

``If the central bank has to be taken over, it will be taken over,'' Chavez said in a speech to farmers in the western state of Zulia. ``It isn't right that we have $21 billion in reserves and the central bank refuses to finance the development of the country.''

Chavez, whose opponents are seeking a recall vote this year to force him from office amid the country's worst recession on record, has said he wants to lend the money to farmers to bolster agricultural output and turn the South American country into a net exporter of food. Venezuela, one of the four biggest oil suppliers to the U.S., imports about 60 percent of its food.

`Neo-Liberals'

In his speech, Chavez said he was mulling several possibilities for gaining access to the central bank's reserves, including asking the legislature or supreme court to force the bank to give the government the $1 billion.

Chavez has clashed with the central bank for the last two years, calling the bank a ``nest of neo-liberals.'' Chavez demanded last year that the bank fix interest rates for commercial bank loans, which it refused to do. He also fixed the Venezuelan currency's exchange rate to stem a decline in foreign currency reserves.

The country's foreign reserves climbed to $20.7 billion yesterday, up from $11 billion in January 2003.

Domingo Maza, one of seven bank directors, said last month that using international reserves to fund government spending is illegal.

The government has asked the central bank to look at ways that central bank reserves can be used to finance agricultural projects and has no plans to take over the bank, Dopazo said.

``There is no current discussion within the government to take over central bank reserves,'' Dopazo said.

Venezuela today sold $1 billion of 30-year bonds, taking advantage of a plunge in borrowing costs to raise funds.

The Finance Ministry said in a statement that the government is committed to servicing its debts and protecting the rights of bondholders.

A central bank spokesman declined to comment on Chavez's statements.

Last Updated: January 7, 2004 18:08 EST