The policy change ends Bolivia's long-standing dollar peg as the government seeks to restore macroeconomic stability, ease dollar shortages and support talks on an IMF financing program.
Bolivia has moved to a flexible exchange-rate system, ending a 15-year dollar peg in a major policy shift aimed at restoring macroeconomic stability, preserving external competitiveness and helping rebalance the country's external accounts. The change comes as Bolivia faces acute dollar shortages, falling foreign-exchange reserves and a wide gap between official and parallel-market exchange rates. The government had long held the boliviano at 6.86 per dollar for purchases and 6.96 for sales, but the central bank updated its website to show an official rate of 9.73 bolivianos per dollar as of Monday, implying a roughly 30% drop from the previous buy rate. Authorities have more recently used a reference rate of around 9.90 bolivianos per dollar for most commercial and financial transactions. The move is part of a broader effort to normalize currency markets and bolster investor confidence while Bolivia negotiates an IMF financing program that Reuters said is expected to be worth around $3 billion, though the government is seeking at least $2.5 billion. The shift has also fueled domestic political tensions, with labor groups opposing IMF borrowing and road blockades prompting President Rodrigo Paz to declare a state of emergency last week.