Venezuelan Socialist President Hugo Chavez announced devaluation last week, cutting the exchange rate of the Bolivar against the dollar by half. The move was hoped to boost oil income and goods deemed nonessential in order to bolster state coffers.
The measure strengthens the financial balance sheet in South America' largest oil exporter but risks angering the leftist government support ahead of an election in September due to potential prices rise and inflation.
After inspecting prices, Venezuelan soldiers and authorities closed at least two supermarkets belonging to a Colombian retailer controlled by France's Casino.
National Guard soldiers armed with automatic rifles forced the closure of an electronics hardware store at the start of a day-long revision of retailers in Catia La Mar.
[Jose Useche, Consumer Watchdog]: (Spanish, Male)
"Obviously the operation includes reports from people who have been affected by this and we are going into these places and we corroborate the invoices and check to ensure that from one month to the other or from one day to the next, the prices haven't changed."
One consumer expected the worst by next week with price gouging.
[Jeny Marquez, Catia la Mar Resident]: (Spanish, Female)
"I imagine that by next week the products should be priced higher because of this devaluation that happened."
The new system sets a rate of 2.6 to the dollar for essential items like food and medicine, but gives a much lower rate of 4.3 to the dollar for other goods and oil exports.
The price rises may bring a negative impact to the president’s popularity.