The Central Bank (BCB) used $1.7 billion from its Net International Reserves (NIR) to control dollar demand and market speculation in Bolivia.
BCB President Edwin Rojas shared this on Red Unitel, a local TV channel. He noted that although reserves fell initially, they became stable in the last four months of 2023.
Rojas spoke in various cities about 2023’s economic and financial system. He mentioned actions taken to stop speculation and the public’s rush for dollars.
This situation caused the bank to use over $1.7 billion. If not used, reserves might have hit $4 billion. Bolivia is now normalizing dollar supply and demand.
Other reasons for the reserve decrease were debt issues from gas sales to Argentina and global rate increases.
These factors led to lower gas export, higher fuel import costs, and increased external debt service.
BCB confirmed a significant drop in Bolivia’s international reserves, the lowest in 18 years.
At the end of 2023, reserves were at $1.709 billion, down from $3.796 billion the previous year. This reduction highlights Bolivia’s economic struggles, marking a two-decade low.
Background
Edwin Rojas’s remarks reflect Bolivia’s economic struggles, particularly its vulnerability due to reliance on natural resource exports.
The country, like many in South America, faces fluctuations in commodity prices, impacting its financial reserves and stability.
Compared to larger economies, Bolivia’s modest reserves highlight its limited resources. These challenges offer lessons in managing economies dependent on resources.
The Central Bank’s proactive approach in managing finances is crucial in these uncertain global markets.
This scenario underscores how global finance affects national economies. Understanding Bolivia’s economic position is key to assessing its progress and setting achievable goals.