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Venezuelan Inflation Rate Rises to Highest in Eight Months

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Feb. 8 (Bloomberg) -- Venezuelan inflation accelerated to 22.2 percent in January, the fastest pace in eight months, led by a jump in food prices, the central bank said.

The nationwide inflation rate rose from 20.1 percent the month before, the bank said today in an e-mailed statement. Prices climbed 3.3 percent in the month, exceeding the 2.7 percent median estimate of six economists in a Bloomberg survey. Food prices leaped 5.3 percent in January.

Since President Hugo Chavez won re-election in October, the bolivar has fallen more than 35 percent to 18.41 bolivars per dollar on the black market, where many non-essential imports are financed, according to Lechuga Verde, a website that tracks the rate. Shortages of imported goods ranging from toilet paper to poultry have increased as the government more than halved the supply of dollars at official rates since winning the election, according to Bulltick Capital Markets.

“The most important inflationary factor is the increase in the unofficial exchange rate, which is the main part of price formation,” Alejandro Arreaza, an economic at Barclays Plc, said by phone on Feb. 5. “The government has reduced dollar supply amid a huge increase in liquidity caused by pre-election public expenditure.”

Along with food prices, which account for 37 percent of the inflation index, restaurants and hotels pushed prices up 4.2 percent last month, the central bank said.

Vice President Nicolas Maduro has appeared several times on state television in recent weeks, ordering the national guard to seize producers it says are hoarding food supplies and promising to make life difficult for “bourgeoisie” businesses he accuses of trying to sabotage the economy.

Consumer prices in the capital Caracas rose 3.3 percent in January from the month before, the bank said.

To contact the editor responsible for this story: Nathan Crooks at ncrooks@bloomberg.net

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