Chavez 67% Spending Surge Sets Up Devaluation After Vote

Venezuelan President Hugo Chavez’s 67 percent increase in government spending is setting the stage for a currency devaluation after national elections next month.

As the 58-year-old president boosts wages and builds houses for the poor to win a third term, the bolivar is tumbling in unregulated markets to a level 62 percent weaker than the regulated exchange rate, compared with a 50 percent difference at the end of 2011. Most individuals and businesses now pay 11.19 bolivars per dollar versus 8.63 at the start of the year and the fixed 4.3 bolivar official rate.