Bolivia Floats Its Currency and the Rate Jumps to 9.73

Economy · Bolivia

Bolivia latest: Bolivia news — latest coverage · Bolivian Lawmakers Urge Pre-emptive Arrests Before Evo Morales Protests

A long-protected exchange rate finally broke under the weight of empty reserves and vanished gas income. Bolivia is now testing whether a post-MAS government can trade old subsidies for new foreign capital.

The End of the Dollar Peg

Bolivia kept an official exchange rate of 6.86 bolivianos per dollar for purchases and 6.96 for sales until late June 2026.

On June 27, 2026, Reuters reported that the country would adopt a flexible exchange-rate system, ending the 15-year peg.

The Central Bank opened trading at 9.73 bolivianos per dollar on June 29, 2026.

Before the move, the parallel market had at times traded near 20 bolivianos per dollar, signalling severe foreign-currency stress.

Reuters linked the policy shift to a severe scarcity of dollars and said the float aimed to normalise currency markets and restore investor confidence.

The Parallel Market and the Official Rate

A February 2026 report put the parallel rate at about 9.10 to 9.30 bolivianos per dollar while the central bank reference rate was around 8.64 to 8.82.

By late August 2026, reporting showed the parallel or peer-to-peer dollar around 11.5 to 12 bolivianos.

The official rate had also weakened sharply, reaching about 11.58 to 11.93 bolivianos per dollar around August 17 to 28, 2026.

The gap between official and parallel rates narrowed after the float but remained a live pricing signal for importers.

For foreign businesses, the moving exchange rate now alters the real cost of local wages, taxes, and repatriated profits.

Reserves Below One Month of Imports

BTI’s 2026 country report said the most concerning issue was the limited availability of dollars.

Liquid reserves had fallen to less than $200 million at one point, insufficient to cover even one month of imports.

Reuters reported in January 2026 that the Paz administration was working with the IMF on a $1.9 billion program to stabilise the crisis-hit economy.

By June 2026, Reuters said a broader financing package worth at least $2.5 billion was being negotiated with the IMF.

The reserve collapse is the direct reason local firms struggle to pay for machinery, medicines, and intermediate goods.

The Collapse of Gas Export Income

BTI reported that gas export revenues fell from $6.1 billion in 2014 to $2.04 billion in 2023.

The crisis worsened because of a sharp decline in gas exports driven by depletion of natural gas reserves.

Reuters tied the foreign-currency shortage to declining hydrocarbon revenues and the need to attract investment back into energy.

Gas was once the anchor of Bolivian external accounts and the main source of dollars for the state.

Its decline means the central bank can no longer defend an overvalued boliviano through commodity earnings.

Fuel Queues and Import Dependency

Bolivia imports a very large share of the fuel it consumes, with the large majority of its diesel and much of its gasoline imported.

Reuters and AFP reported that fuel queues remained widespread in August and September 2026.

On September 1 to 3, 2026, the government intervened in YPFB, the state oil company, to review the import and distribution chain.

YPFB is Bolivia’s main state energy firm and has controlled most fuel imports and domestic supply.

The intervention showed that distribution failures, not just missing dollars, were emptying pumps.

Subsidy Cuts and Private Importers

A policy report said fuel and electricity subsidies had consumed nearly 18% of the national budget in 2024.

A February 2026 report said the government eliminated fuel subsidies in December 2025, with gasoline prices rising 86% and diesel prices 160%.

Another 2026 source said diesel prices for large industrial consumers rose 163% and gasoline 86% after the reform.

In August 2026, the government raised diesel prices for large consumers from 9.80 bolivianos per liter to 18 bolivianos per liter, an 84% increase.

Under Supreme Decree 5644 in July 2026, private distributors were authorised to import and sell refined fuels up to 20,000 liters per month.

The Treasury and Import Gaps

A Reuters-linked report said the Treasury ceiling for fuel imports was doubled to 2 billion bolivianos on August 27, 2026, from 1 billion bolivianos.

Gasoline imports fell 38.6% and diesel imports fell 29.6% in January to June 2026 versus the same period of 2025.

Fuel and lubricant imports in June 2026 were $140.9 million, down 42.9% from $246.8 million in May 2026.

One report said fuel spending was about $40 to $50 million a week in July 2026.

The doubling of the import ceiling shows the Treasury is absorbing a larger share of the dollar scarcity.

Inflation After the Float

BTI reported Bolivia’s annual inflation rate rose to 9.95% in 2024, the highest since 2008.

A 2026 macro report projected inflation above 25% in 2026 in a severe-stress scenario.

Another 2026 report cited 4.82% cumulative inflation in the first half of 2026 and 9.23% twelve-month inflation as of mid-2026, according to INE.

INE is Bolivia’s national statistics institute.

Rising inflation was linked to fuel scarcity, the exchange-rate adjustment, and subsidy removal.

The Post-MAS Political Shift

The Congressional Research Service reported that after 20 years of MAS governance, the 2025 elections brought Rodrigo Paz of the centre-right PDC to power in November 2025.

Americas Quarterly described Paz’s October 19, 2025 runoff victory as a policy reset after two decades of MAS rule.

MAS is the Movement Toward Socialism, the party that dominated Bolivian politics for two decades.

Reuters said MAS was badly weakened in the 2025 election and that congress was fragmented among multiple centre-right blocs.

The new government intends to reorient policy toward economic stabilization and better U.S. ties.

Investment Law and Energy Policy

On August 11, 2026, Reuters reported that President Rodrigo Paz planned an Investment Law to attract private firms through a more competitive tax and royalty regime.

The government planned to loosen state control over energy and mining and reduce the role of state company YPFB.

Reuters said the administration aimed to cap combined tax and royalty burdens on energy companies at about 50% to compete with regional peers.

The Paz government also pledged to honor existing hydrocarbons and lithium contracts with Russian and Chinese entities and to reassure investors.

For foreign operators, the stated cap and contract continuity reduce the political risk of expropriation but do not remove foreign-exchange risk.

What It Means for Foreign Business

Importers now face a moving official rate that had reached around 11.58 to 11.93 bolivianos per dollar in late August 2026.

A 2026 report cited a past official note saying Bolivia spent about $2.0 billion on fuel subsidies in 2023.

The lower subsidised diesel price of 9.80 bolivianos per liter remained for transport operators and small users in the cited reports.

Foreign firms in logistics, mining, and energy must now budget for subsidy changes, fuel queues, and a still-fragile dollar supply.

The IMF negotiations remain central because only a deal can rebuild the reserves needed for orderly trade and profit repatriation.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.