Bolivia Balances Debt Payments And Stability With Rising Reserves

(MENAFN- The Rio Times) Bolivia's financial landscape shows some signs of resilience. The country's Net International Reserves (NIR) reached $2.066 billion by October's end. This marks a 21% increase from the $1.709 billion recorded in late 2023.

Edwin Rojas, President of Bolivia's Central Bank , shared this news. He noted the reserves' stable and positive trend. This growth comes amid complex regional economic conditions. The reserves play a crucial role in Bolivia's economic strategy.

They enable the country to meet its international financial commitments. Rojas highlighted that over 90% of external debt has been paid to date.



Bolivia's government has implemented innovative measures to bolster its reserves . The Gold Law is one such mechanism. It allows for efficient management of natural resources, strengthening the reserve levels.

These reserves support various domestic policies. They back subsidy programs and help maintain economic stability. A slight dip in reserves to $1.970 billion occurred in early November. Rojas attributed this to temporary operational flows. He assured that the overall growth trend remains intact.

The current reserve levels reflect Bolivia's economic maneuvering capabilities. They provide a buffer against global economic challenges. Bolivia has faced moderate inflationary pressures and commodity price fluctuations.

However, the NIR management has helped maintain macroeconomic stability. This balance between international commitments and domestic needs showcases Bolivia's pragmatic economic approach. It emphasizes self-reliance while engaging with global financial systems.
Background
Bolivia's recent attempt to loosen restrictions on its gold reserves highlights the country's dire economic situation. The Central Bank of Bolivia briefly introduced a measure allowing it to report gold holdings biannually, potentially enabling it to dip below the legally mandated minimum of 22 tons between reporting dates.

This move, quickly reversed due to concerns over economic speculation, reveals the depth of Bolivia's financial crisis. The country's foreign currency reserves have plummeted from $15 billion in 2014 to a mere $1.7 billion in late 2023.

This dramatic decline stems from a perfect stor of economic challenges. Bolivia's natural gas exports, once a cornerstone of its economy, have dwindled from $6 billion annually in 2014 to just $2 billion in 2023. This sharp decrease has left a gaping hole in the national budget.

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