The boliviano depreciated to 9.73 per USD after Bolivia abandoned its fixed exchange rate, seeking $2.5 billion in IMF financing.
Bolivia has scrapped its 15-year-old dollar peg, allowing the boliviano to float freely and depreciate by roughly 30% to 9.73 per USD. The move follows mounting reserve pressures and a parallel market already pricing the currency near 20 per dollar, signaling a partial correction rather than a sudden shock.
The fixed rate of 6.86 bolivianos per USD, in place since 2011, was abandoned via government decree on Friday. Analysts note the shift reflects reserve depletion, with IMF financing talks now critical to stabilizing the new regime. A deal worth at least $2.5 billion is seen as essential to prevent a disorderly float.
Near-term inflation risks loom due to Bolivia’s import dependency, while political opposition from labor groups adds uncertainty to fiscal adjustments the IMF may demand. Regional commodity-linked currencies could face competitiveness shifts in agriculture, energy, and mining trade flows.