Venezuela's Chavez devalues currency

CARACAS (Reuters) – President Hugo Chavez devalued Venezuela’s bolivar currency on Friday, attempting to resuscitate local production but running the risk of worsening inflation in the South American oil-exporter’s flagging economy.

Facing a recession and galloping prices in the 11th year of his presidency, Chavez had long been pressured by business for an adjustment of the over-valued exchange rate, but was not expected to make the move so close to an election.

Venezuela votes for a new National Assembly in September.

The move will likely boost the state’s bolivar revenues from oil and help local exporters, but add pressure on prices, which soared 25 percent in 2009, the highest in the Americas.

Reuters