(Adds Tuesday trading, criticism, context, changes byline)
CARACAS, March 25 (Reuters) - Venezuelan bonds rose on Tuesday on optimism that a new free-floating foreign exchange system would improve the government's stretched finances even as critics slammed the move as the biggest devaluation in the OPEC nation's history.
The Sicad 2 foreign exchange mechanism opened on Monday offering dollars at 51.8 bolivars, or eight times the official rate, with thin trading volumes. Traders said greenbacks were selling for about 54 bolivars on Tuesday amid thin volumes.
The system will help ease chronic hard currency shortages that have left businesses struggling to obtain imported goods, though economists note its success will hinge on whether it can sell enough dollars to meet demand.
"There is euphoria on the first signs of pragmatism from the Maduro administration to confront macro imbalances," said Siobhan Morden, Jefferies' head of Latin America strategy.
Venezuelan sovereign bonds extended gains from Monday, rising 0.64 percent on the JPMorgan EMBI+ index compared with 0.22 for emerging markets overall.
The benchmark Global 2027 was up 1.02 percent.
Traders said they expected prices would remain between 50 and 55 bolivars on Tuesday. The Sicad 2 rate is the average of transactions in a trading day, and is reported by the central bank after the close of operations.
That adds a third official exchange rate to the 11-year-old currency mechanism created by late socialist leader Hugo Chavez.
The bolivar has strengthened rapidly on the black market as a result of Sicad 2, climbing from 85 bolivars per dollar in recent weeks to reach around 59, approaching parity with the new rate.
The measure may help companies including American Airlines and consumer goods maker Colgate-Palmolive that have been unable to repatriate millions of dollars because the government has not approved their requests.
Sicad 2 should offer them a legal alternative if the volume is sufficient to meet demand.
The government says the system will provide about 8 percent of dollar sales. The remainder will be disbursed through the currency controls at 6.3 bolivars for preferential goods and around 11 bolivars for other items.
Despite criticizing Venezuela's long-standing currency controls for years, opposition politicians reacted angrily to Sicad 2, calling it a "mega-devaluation" that would fuel an inflation rate already the highest in the Americas.
"It's Nicolas' 'black Monday'," opposition leader Henrique Capriles tweeted, saying the government had taken advantage of unrest on the streets to quietly introduce the measure.
Critics said the devaluation of 88 percent dwarfed previous ones such as the 1983 currency adjustment that marked the end of the country's oil boom years and ushered in more than a decade of economic turmoil.
Many economists nonetheless recognized the move was a much-needed market-friendly policy that should help government coffers once state oil company PDVSA starts selling its export revenues for a higher price than it was getting previously.
The extent of the impact on inflation and state finances will, however, depend, on the volume traded.
Barclays' analyst Alejandro Grisanti said he had expected annual trade of about $11.6 billion, or around $63 million per day on Sicad 2, but weekend comments by Maduro implied offer would be about half that.
"We see that as a concern," he said.
Chavez set up currency controls in 2003 in response to an opposition-led oil industry walk-out that nearly left the country without hard currency.
He maintained that policy even after the government stabilized output and soaring oil prices flooded the country with cash, spawning corruption as well-connected officials bought cheap dollars and flipped them for huge profits on the black market.
Foreign companies have long complained of difficulties in getting money out of Venezuela, with airlines alone saying they are owed nearly $4 billion.
(Additional reporting by Andrew Cawthorne, editing by Stephen Powell and Tom Brown)