The president of Venezuela, Hugo Chavez has announced that a chain of supermarkets controlled by France's Casino is being nationalized as the company has violated laws and indulged in price gouging after the devaluation of the Bolivar currency by the government.

Speaking on his weekly TV show the president said, "Because of multiple violations of Venezuelan laws the Exito chain will now belong to the republic, there is no way back."

Chavez has nationalized large projects in various sectors including major oil projects and also electricity and telecommunications companies among others.

The president is in his 11th year in office while he intends to build a socialist society in Venezuela. He sees a mentor in Cuba's Fidel Castro. Venezuela is one of the top oil exporters of the world and oil accounts for nearly 90% of the country's foreign currency inflows and
50% of government revenues.

The store called Exito ran supermarkets in Caracas and several other cities in the country and is accused of raising price without justification. The stores are run by Colombian retailer Alamcenes Exito. The chain is also present in Brazil, Argentina, Mexico and Uruguay.

The currency of the country was devalued by the government on Jan. 8 in order to boost government finances and revive the economy while it also risked further increase in inflation. The country's inflation is now the highest in Latin America at an annual rate of nearly 27% in 2009.

The bolivar's official exchange rate is set at 2.45 to the US dollar since March 2005. Now the currency has two rates, 2.60 to dollar for "priority" imports and 4.30 to the dollar for other items.

The opposition has accused the government of underinvestment in the infrastructure.

Chavez feared that rising prices could anger his poor supporters and thus ordered troops to monitor shopping districts.

The government is undertaking some legal reforms to be able to takeover companies which indulge in speculation and the president said the reforms needed to be in place so the nationalization of Exito could be completed.

The country is hard gripped with recession even as other countries in the region have recovered. The central bank estimates that the economy of the country sank 2.9% in 2009. International Monetary Fund projects a contraction of 0.4% next year while Latin America as a whole is expected to grow by 4%.

The inflation and government policies continue to keep the Venezuelan economy from recording healthy growth rates.