Venezuela's inflation at 27.3 percent in September

[spanza]

On 1:33 pm EDT, Tuesday October 6, 2009


CARACAS, Venezuela (AP) -- Venezuela's government says inflation rose slightly in September as the nation battles the highest consumer price gains in Latin America.

The Central Bank says inflation rose to 27.3 percent -- up from 26.7 percent in August.

The bank adopted a new method of measuring nationwide price gains last year, making year-on-year comparisons difficult. But inflation in the capital of Caracas fell to 28.9 percent in September, down from 36 percent a year earlier.

Finance Minister Ali Rodriguez has said Venezuela aims to close the year with inflation at 26 percent.

Venezuela ended 2008 with 30.9 percent inflation.


http://finance.yahoo.com/news/Venezuelas-inflation-at-273-apf-2578323494.html?x=0&.v=1

[Braulio]

1. How Nice

From Reuters

Venezuela's chronic inflation poses a thorny problem for the government as it prepares its second stimulus package of the year to prop up the economy. Stimulus spending will likely boost inflation unless the distorted foreign exchange system is tackled, economists say.

In the past the government has resorted to sales of billions of dollars in debt to mop up liquidity and provide a legal means of acquiring dollars, a plan that has succeeded in temporarily reducing the black market exchange rate. The recent recovery in oil prices should allow more dollars to flow to importers and reduce pressure on the black market exchange rate, economists said.

Nevertheless, consumers are likely to continue to spend entire paychecks and shun savings in a country where interest rates are kept below inflation to encourage consumption.