Venezuela to devalue the bolivar

• Tweet

CARACAS, Venezuela, Feb. 9 (UPI) -- Venezuelan Finance Minister Jorge Giordani said the country will devalue its currency 32 percent as part of an attempt to close a budget deficit.

The devaluation, set for Feb. 13, will increase the amount of currency in circulation.

Election-year spending that supported President Hugo Chavez's re-election bid in 2012 nearly tripled the government's annual budget deficit, Mercopress reported Saturday.

Giordani said Chavez ordered the devaluation -- the fifth in nine years -- from Cuba, where he is recovering from his fourth cancer surgery.

"We've got to do more with less," said Vice President Nicolas Maduro on state television before the devaluation was announced.

Giordani said the devaluation "isn't a change that was done for fiscal reasons."

"We have sufficient revenue but we need to adjust the accounts," he said. "We need an increase in efficiency and efficiency means spending less."

Devaluing a currency decreases the standard of living, as it makes imports more expensive, but exports become more affordable in foreign markets -- which would give Venezuela's oil-export oriented economy a boost.