Venezuela's annual inflation rate accelerates for the eleventh consecutive month

Venezuela's annual inflation rate accelerated for the eleventh consecutive month, driven by rising food costs, even after the government took steps to drain liquidity and curb price gains in the oil exporting economy. Consumer prices measured by the central bank's benchmark Caracas index climbed 34.5 percent in August from a year earlier, the fastest pace in more than five years. Prices advanced 1.7 percent from July, the central bank reported on its Web site. Venezuela's annual inflation rate, the highest in Latin America, may begin to slow in the second half of the year as government bond sales designed to drain liquidity take effect and a slowdown in economic growth causes consumer demand to weaken. "Annual inflation may be reaching a peak,'' said Milton Guzman, chief economist at Santander Investments in Caracas. ``The reduction in the money supply is having an impact on activity. We're probably going to see a gradual slowdown from here until the end of the year.''