After two decades of state policies, Bolivia can no longer control its most basic economic indices and the reserves disappear. The highland country is facing a crisis and its model is bankrupt. Since February, the Central Bank of Bolivia (BCB) has stopped publishing data on its foreign exchange reserves. All investors in the country are scared. Given the uncertainty, Bolivians have chosen to buy Peruvian soles as a refuge asset. Why are they doing it?
The lack of dollars in Bolivia
Due to the shortage of dollars in Bolivia, many Bolivians, especially those in the commercial sector, travel to the border with Peru to exchange their currency for soles. This, in order to protect your savings and assets.
“The population calculates that the BCB will not be able to defend the exchange rate, which will end up devaluing, so they are queuing up to buy dollars, before the devaluation occurs,” explains economist Waldo Mendoza about the situation in the neighboring country.
Jorge Akamine, president of the National College of Economists of Bolivia (Coneb), indicates that the run on dollars in the highland nation will not stop in the short term.
There is a great shortage of dollars in Bolivia. Photo: diffusion
The Peruvian sol: a strong currency
“What Bolivians are doing is taking refuge in a strong currency that allows them to preserve their savings and assets,” Jorge Akamine told Gestión about the purchase of soles by Bolivian citizens.
Currently, the dollar is S/3.70, having dropped significantly so far in 2023. The Peruvian currency is one of the most stable in the region.
The sol is one of the most stable currencies in the region. Photo: diffusion
Source: Larepublica
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