Bolivia central bank sees USD accounts to be reopened - Bloomberg News

Bolivia’s central bank has announced plans to reopen USD accounts, a move that marks a significant shift in the country’s monetary policy following the end of a 15-year peg to the U.S. dollar. The government recently adopted a flexible exchange-rate system, effectively devaluing the boliviano by adjusting the official rate to 9.73 bolivianos per dollar, a 30% drop from the previous fixed rate of 6.86 for purchases. This decision aims to restore economic stability, strengthen macroeconomic balance, and address a severe shortage of foreign exchange that had led to the emergence of a parallel market.

The reopening of USD accounts is expected to improve access to foreign currency for businesses and financial institutions, supporting trade and investment. The government is also in negotiations with the International Monetary Fund for a $3 billion financing program to rebuild reserves and stabilize public finances. However, challenges remain, including the need to replenish international reserves and manage potential inflationary pressures from the devaluation.

The policy shift has drawn mixed reactions. While the government emphasizes the necessity of external financing for economic recovery, labor groups have expressed concerns over potential austerity measures linked to IMF support. The central bank will oversee the transition, with a focus on maintaining macroeconomic stability and restoring investor confidence.