* Suriname devalues currency 16.4 percent
* Hikes on gasoline, alcohol, sales taxes
By Ank Kuipers
PARAMARIBO, Jan 20 (Reuters) - Suriname on Thursday devalued its local currency by 16.4 percent and announced tax raises on alcohol, tobacco, gasoline and basic services as the government sought to offset the impact of payments of overdue public worker salaries.
Suriname's central bank late on Wednesday said it would devalue the official exchange rate to 3.35 Suriname dollars to the U.S. dollar from the previous rate of 2.80 Suriname dollars. The measure came into effect on Thursday.
The government recently announced it would pay long overdue public worker salaries, raising concern over the impact on the local economy.
Vice President Robert Ameerali on Thursday announced the tax increases, including 50 percent tax increase on alcohol and tobacco and a 2 percent sales tax hike.
Some tax hikes must be approved by the country's legislature.
Gasoline prices increased on Thursday because fuel imports were hit by the devaluation. Bus and taxi drivers quickly increased their prices to compensate for the extra cost.
Suriname, a small former Dutch colony on the northeastern shoulder of South America, produces gold and bauxite, which dominates the country's economy. The country also has a nascent oil industry.
Aided by strong commodity prices the country managed to maintain economic growth despite the recent global recession and debt-to-GDP ratio is one of the lowest in the region.
Last year, former coup leader Desi Bouterse took office and foreign investors are waiting to see if he will reinvent himself. But some fear he may shed the economic policies of his predecessor. [ID:nN12105202]
Reporting by Ank Kuipers; Editing by Andrew Hay