Page last updated at 23:01 GMT, Sunday, 10 January 2010

Venezuela's President Chavez warns price 'speculators'

Shoppers look at imported appliances in Caracas (9 January 2010)
Venezuelans have rushed to the shops to buy imported luxury goods

Venezuela's President, Hugo Chavez, has said troops will seize control of any business that raise prices in response to the devaluation of its currency.

He said there was no reason for prices to go up, and speculators' businesses would be handed over to the workers.

Venezuelans have rushed to the shops to buy imported goods before the bolivar's devaluation comes into effect.

Mr Chavez says devaluing the bolivar by at least 17% will boost competitiveness and reduce dependence on imports.

But critics say it will fuel inflation, which has already risen to 25%.


The bolivar's official exchange rate, which is set by government decree, had been held steady at 2.15 to the US dollar since the last devaluation in March 2005.

But on Friday, President Chavez announced that it would now have two rates - 2.60 to dollar for "priority" imports, and 4.30 to the dollar for other items considered non-essential - a 50% devaluation.

I want the National Guard to hit the streets with the people to fight against speculation and take measures
Venezuelan President Hugo Chavez,

He said that the two rates would have the effect of "limiting imports that are not strictly necessary and stimulating export policy".

Oscar Meza, director of the Venezuelan economic think tank, Cendas, predicted the move would push annual inflation above 33%.

"It's impossible for prices not to be adjusted," he told the Associated Press. "If they aren't adjusted, they'll disappear."

Mr Chavez dismissed the criticism on Sunday on his weekly television and radio programme, Alo Presidente, saying there was "no reason for anybody to be raising prices".

He urged his supporters to "publicly denounce the speculator" and warned business owners that he had asked the military to formulate an "offensive plan" that would see them "take over any business, of any size, that plays the bourgeois speculation game".

"I want the National Guard to hit the streets with the people to fight against speculation and take measures," he said, without specifying.

Luis Ignacio Planas of the opposition Copei party said the government was "acting like a pickpocket, sticking its hands in the pockets of Venezuelans, taking their money to continue financing and paying for an irresponsible economic policy".

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France24 Venezuela army shuts stores amid devaluation panic - 9 hrs ago
CNBC Venezuela Devaluation Boosts Bonds; Consumers Worry - 15 hrs ago
New York Times Chavez Warns Businesses After Currency Devaluation - 20 hrs ago
New Zealand Herald Chavez threatens to seize businesses that raise prices - 21 hrs ago
Economist Intelligence UnitVenezuela: Taking the hit - 22 hrs ago
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