The Central Bank has announced that it will maintain the exchange rate of the Bolivian currency against the US dollar. The US dollar closed at an average of 6.85 bolivianos, representing a 1.75% change from the previous day’s rate of 6.73 bolivianos. Over the past seven days, the US dollar has seen an increase of 1.89%, with a year-on-year increase of 2.15%. This data marks a departure from the negative trend of the previous two days. The volatility of the past week has been slightly higher than that of the previous year, indicating a more unstable behavior.
Despite the Central Bank of Bolivia’s official exchange rate of 6.96 for sale and 6.86 for purchase, the street price of the dollar differs. This was evident at the beginning of 2023 when a shortage of US currency was recorded. In terms of inflation, the Bolivian government anticipates a rate of 3.60% by 2024, close to the ideal three percentage points. Bolivia has maintained stable inflation control in recent years, unlike other economies in the region. Economic growth forecasts by the Central Bank of Bolivia expect a 3.71% growth in 2024.
The Bolivian has been the legal currency of Bolivia since 1987, replacing the Bolivian peso. The Central Bank of Bolivia regulates the issuance of the currency, and currently, Bolivian coins are in circulation. During the colonial era, the minting and printing of Bolivian currency ceased due to lack of political interest, leading to coins and banknotes being created abroad. In 2013, they were still manufactured in countries such as the United Kingdom, France, and Chile.
In 2014, Bolivia relied on high public spending and growing domestic credit to maintain its growth, resulting in increased public debt and reduced international reserves. The coronavirus pandemic had a severe impact on Bolivia’s economy, although inflation was lower than in other Latin American nations. In 2022, Bolivia had a lower inflation rate than its neighboring countries due to fuel price subsidies and a fixed exchange rate of the dollar with respect to the local currency. However, the country faced a loss of international reserves and increased debt. Additionally, global efforts to transition to clean energy will push Bolivia, one of the largest gas exporting countries, to seek alternatives.
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