The Venezuelan government has seized nearly 4 million toys from a private company accused of price-gouging, and will redistribute them to poor families ahead of Christmas.

"The children of the country will have a happy Christmas," said William Contreras, the head of the government's price regulation agency, Sundde. "We will guarantee their Christmas gifts."

Two senior officials at Kriesel, the largest importer of toys into the inflation-ravaged South American state, have been arrested as part of an ongoing investigation.

They stand accused by Sundde of "commiting a scam against the state" by hoarding the toys to artificially inflate their worth, while claiming the goods were being stockpiled because "children don't like these models."

"Dolls, toy cars, bicycles, construction sets and other overpriced toys were the arsenal used by this company in their economic war against the people," announced Sundde.

Violent protests erupt in Venezuela against President Maduro

The Venezuelan government imposes fixed prices on most products, in an attempt to make them affordable for ordinary people. But with shelves bare and the black-market dollar worth up to 100 times more than its official counterpart, illegal traders have proliferated.

In pictures: Venezuela elections Show all 10 1 /10 In pictures: Venezuela elections In pictures: Venezuela elections An opposition masked man holds a Venezuelan national flag as supporters of Venezuelan opposition coalition Mesa de Unidad Democratica (MUD) celebrate the victory of the party in Caracas, after the Venezuelan National Election Council's President, Tibisay Lucena (unseen), announced that MUD won the legislative election EPA In pictures: Venezuela elections Several people celebrate in a street in Caracas EPA In pictures: Venezuela elections A woman reacts as people celebrates in a street in Caracas EPA In pictures: Venezuela elections Humberto Lopez, known as "El Che", reacts as National Electoral Council (CNE) President Tibisay Lucena announces the official results of parliamentary elections in Caracas. Venezuela's opposition won control of the legislature from the ruling Socialists for the first time in 16 years, giving them a long-sought platform to challenge President Nicolas Maduro Reuters In pictures: Venezuela elections Venezuelan President Nicolas Maduro speaks after listening to the results of the legislative elections in Caracas. The Venezuelan opposition won national elections by a landslide, with at least 99 of the 167 seats confirmed for the alliance of the Democratic Unity Roundtable (MUD). It was the first defeat of the socialist movement since its founder Hugo Chavez came to power in a 1998 electionelection In pictures: Venezuela elections Opposition leaders, from left to right, Lilian Tintori, wife of jailed Venezuelan opposition leader Leopoldo Lopez, Freddy Guevara, of the Voluntad Popular party, Jesus Torrealba, head of the Democratic Unity Movement (MUD) party and deputy Julio Borges celebrate in Caracas. Venezuela's opposition won control of the National Assembly by a landslide, delivering a major setback to the ruling party and altering the balance of power after 17 years of socialist rule AP In pictures: Venezuela elections Venezuelan opposition leader Henrique Capriles votes in the legislative election, in Caracas Getty Images In pictures: Venezuela elections A citizen votes in the legislative election in Caracas Getty Images In pictures: Venezuela elections Presidential Guard officers hold their national identification cards as they enter a polling station during congressional elections in Caracas AP In pictures: Venezuela elections Voters enter a public school serving as a polling station, decorated with an image of Venezuela's late President Hugo Chavez, right, and current President Nicolas Maduro, during congressional elections in Caracas. The system built by Chavez faces its gravest electoral test as voters cast ballots in what seems to have become a tightening race for control of the national legislature AP

And the long-simmering economic crisis fuelled by rampant inflation and the subsequent collapse of the national currency boiled over this year, as global oil prices plummeted.

Venezuela owes $120 billion to foreign creditors, and it is feared the unpopular, heavy-handed regime of Nicolás Maduro may be forced to default on repayment of these loans.

The toy raid follows steep price cuts on clothes, shoes and other essentials, as Maduro attempts to regain control of an economy which is galloping away from him.

Larger denomination notes are shortly to be issued, as the country's largest bank note is currently worth just 2 pence. A bottle of soft drink can cost 25 times that amount.

Inflation is set to rise by 1660% next year, in a country which already tops the global economic "misery index". Among riots and looting, hospitals are running short of basic supplies.